v3.26.1
Commitments and Contingencies
6 Months Ended
Jun. 30, 2026
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Legal Matters
Due to the nature of the Company's business, the Company may at times be subject to claims and legal actions. The Company accrues liabilities when it is probable that future costs will be incurred, and such costs can be reasonably estimated. Such accruals are based on developments to date and the Company’s estimates of the outcomes of these matters.
During the three months ended June 30, 2026, the Company received a claim from a purported working interest owner asserting rights with regard to four wells drilled on properties acquired as part of the Silverback Acquisition prior to the date of the Silverback Acquisition. The Company is in the process of investigating the claim and has asserted a claim for indemnification from the sellers in the Silverback Acquisition pending final resolution of the claim.
The Company did not recognize any material liability for legal matters as of June 30, 2026, or December 31, 2025. Management believes it is remote that the impact of such matters will have a materially adverse effect on the Company’s financial position, results of operations, or cash flows.
Environmental Matters
The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment. These laws, which are often changing, regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. The Company had no material environmental liabilities as of June 30, 2026, or December 31, 2025.
Contractual Commitments
The Company is a party to a gas gathering, treating and processing agreement with Targa Northern Delaware LLC ("Targa") in Texas. Under the terms of the agreement, the Company agreed to deliver an annual minimum volume that expires the earlier of achieving a specified quantity of cumulative volumes delivered or by the contract expiration date in 2031.
The Company is party to several contracts with RPC Power, our power-focused joint venture. See Note 8 - Equity Method Investment and Note 9 - Transactions with Related Parties for additional information related to RPC Power.
The Company is party to a long-term gas purchase agreement for the Company's New Mexico field with Targa, which was amended and restated (the "A&R Gas Purchase Agreement") in connection with the Company's sale to Targa of Dovetail Midstream, LLC, a wholly owned subsidiary of the Company that held certain midstream infrastructure projects in Eddy County, New Mexico. The agreement has a quarterly minimum volume commitment for the first 5 years of the 15-year term from the in-service date, which is expected to commence in the fourth quarter of 2026.
The Company is a party to a 15-year water management services agreement ("Waterbridge Agreement") with Waterbridge Stateline LLC ("Waterbridge") to deliver a portion of its New Mexico produced water for disposal purposes within a specified dedicated area. During the first 7 years of the agreement, the Company has both annual and cumulative volume commitments to deliver minimum quantities of produced water. The in-service date is expected to be in the fourth quarter of 2026.