| Derivative Instruments |
Derivative Instruments Oil and Natural Gas Contracts The Company uses commodity based derivative contracts to reduce exposure to fluctuations in oil and natural gas prices. While the use of these contracts partially limits the downside risk for adverse price changes, their use also partially limits future revenues from favorable price changes. We have not designated our derivative contracts as hedges for accounting purposes, and therefore changes in the fair value of derivatives are included and recognized in other income (expense) in our accompanying condensed consolidated statements of operations. As of June 30, 2026, the Company’s oil and natural gas derivative contracts consisted of fixed price swaps, costless collars and basis swaps. The following table summarizes the open financial derivative positions as of June 30, 2026, related to our future oil and natural gas production: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2026 | | 2027 | | 2028 | | | Third Quarter | | Fourth Quarter | | First Quarter | | Second Quarter | | Third Quarter | | Fourth Quarter | | First Quarter | | Oil | | | | | | | | | | | | | | | | WTI Oil Swaps | | | | | | | | | | | | | | | | Volume (Bbl) | | 860,000 | | | 820,000 | | | 725,000 | | | 650,000 | | | 630,000 | | | 605,000 | | | 330,000 | | Weighted
average price
($/Bbl) | | $ | 61.65 | | | $ | 61.42 | | | $ | 61.48 | | | $ | 61.68 | | | $ | 61.38 | | | $ | 61.62 | | | $ | 70.18 | | | | | | | | | | | | | | | | | | WTI Oil Collars | | | | | | | | | | | | | | | | Volume (Bbl) | | 570,000 | | | 550,000 | | | 475,000 | | | 537,000 | | | 400,000 | | | 225,000 | | | 180,000 | | Weighted
average floor
price ($/Bbl) | | $ | 58.25 | | | $ | 57.75 | | | $ | 57.15 | | | $ | 55.84 | | | $ | 52.93 | | | $ | 56.33 | | | $ | 55.00 | | Weighted
average ceiling
price ($/Bbl) | | $ | 72.66 | | | $ | 69.59 | | | $ | 66.42 | | | $ | 67.97 | | | $ | 65.87 | | | $ | 67.06 | | | $ | 73.33 | | | | | | | | | | | | | | | | | | Natural Gas | | | | | | | | | | | | | | | Henry Hub
Natural Gas Swaps | | | | | | | | | | | | | | | | Volume (MMBtu) | | 300,000 | | | 500,000 | | | 600,000 | | | | | | | | | | Weighted
average price
($/MMBtu) | | $ | 3.59 | | | $ | 4.07 | | | $ | 4.19 | | | | | | | | | | | | | | | | | | | | | | | | | Henry Hub
Natural Gas Collars | | | | | | | | | | | | | | | | Volume (MMBtu) | | 900,000 | | | 600,000 | | | 450,000 | | | | | | | | | | Weighted
average floor
price ($/MMBtu) | | $ | 3.05 | | | $ | 3.43 | | | $ | 3.80 | | | | | | | | | | Weighted
average ceiling
price ($/MMBtu) | | $ | 3.74 | | | $ | 4.79 | | | $ | 5.84 | | | | | | | | | | | | | | | | | | | | | | | | | | Waha Basis Swaps | | | | | | | | | | | | | | | | Volume (MMBtu) | | 450,000 | | | 1,950,000 | | | 3,150,000 | | | 3,150,000 | | | 3,150,000 | | | 3,150,000 | | | 1,800,000 | | Weighted
average price
($/MMBtu) | | $ | (2.26) | | | $ | (1.83) | | | $ | (0.94) | | | $ | (0.95) | | | $ | (0.95) | | | $ | (0.95) | | | $ | (1.01) | |
Interest Rate Contracts The Company entered into floating-to-fixed interest rate swaps, in which it will receive a floating market rate equal to one-month Chicago Mercantile Exchange Term Secured Overnight Financing Rate ("SOFR") Rate and will pay a fixed interest rate to manage future interest rate exposure related to the Company’s Credit Facility. The following table summarizes the open interest rate derivative positions as of June 30, 2026: | | | | | | | | | | | | | | | | | | | | | | Open Coverage Period | | Position | | Notional Amount | | Fixed Rate | | | | | (In thousands) | | | | July 2026 - April 2027 | | Long | | $ | 45,000 | | | 3.90 | % |
Balance Sheet Presentation of Derivatives The following tables present the location and fair value of the Company’s derivative contracts included in our accompanying condensed consolidated balance sheets: | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | Balance Sheet Classification | | Gross Fair Value | | Amounts Netted | | Net Fair Value | | | (In thousands) | | Current derivative assets | | $ | 9,544 | | | $ | (9,534) | | | $ | 10 | | | Non-current derivative assets | | 12,116 | | | (8,903) | | | 3,213 | | | Current derivative liabilities | | (31,640) | | | 9,534 | | | (22,106) | | | Non-current derivative liabilities | | (11,761) | | | 8,903 | | | (2,858) | | | Total | | $ | (21,741) | | | $ | — | | | $ | (21,741) | | | | | | | | | | | December 31, 2025 | | Balance Sheet Classification | | Gross Fair Value | | Amounts Netted | | Net Fair Value | | | (In thousands) | | Current derivative assets | | $ | 22,121 | | | $ | (2,980) | | | $ | 19,141 | | | Non-current derivative assets | | 9,316 | | | (4,199) | | | 5,117 | | | Current derivative liabilities | | (3,017) | | | 2,980 | | | (37) | | | Non-current derivative liabilities | | (4,311) | | | 4,199 | | | (112) | | | Total | | $ | 24,109 | | | $ | — | | | $ | 24,109 | |
The following table presents the components of the Company's gain (loss) on derivatives, net for the periods presented below: | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | 2026 | | 2025 | | 2026 | | 2025 | | (In thousands) | | Settlements on derivative contracts | $ | (36,160) | | | $ | 5,151 | | | $ | (47,885) | | | $ | 6,266 | | | Non-cash gain (loss) on derivatives | 69,395 | | | 13,569 | | | (45,850) | | | 6,604 | | | Gain (loss) on derivatives, net | $ | 33,235 | | | $ | 18,720 | | | $ | (93,735) | | | $ | 12,870 | |
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