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DERIVATIVES
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES DERIVATIVES
All derivative financial instruments are recorded at fair value. The Company has not designated its derivative instruments as hedges for accounting purposes and, as a result, marks its 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.”
Commodity Contracts

The Company historically has used fixed price swap contracts, fixed price basis swap contracts, deferred premium puts and costless collars with corresponding put and call options to reduce price volatility associated with certain of its royalty income. At June 30, 2026, the Company had puts, basis puts, put spreads, roll swaps, costless collars and fixed price basis swaps outstanding.

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 the Revolving Credit Facility, each of whom has 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. Market risks involved in the Company’s use of derivative instruments relate to its potential inability to realize the benefits of any increases in commodity prices above the prices established by its derivative contracts.

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

SwapsCollars
Settlement MonthSettlement YearType of ContractBbls/MMBtu Per DayIndex
Weighted Average Differential(2)
Weighted Average Floor PriceWeighted Average Ceiling Price
OIL
Jul. - Dec.2026Roll Swaps15,000
WTI Cushing
$3.97$— $— 
NATURAL GAS
Jul. - Sep.2026
Basis Swaps(1)
80,000
Waha Hub
$(1.99)$— $— 
Oct. - Dec.
2026
Basis Swaps(1)
80,000
Waha Hub
$(1.74)$— $— 
Jan. - Dec.
2027
Basis Swaps(1)
40,000
Waha Hub
$(1.40)$— $— 
Jul. - Dec.2026
Costless Collar
60,000
Henry Hub
$—$2.75 $6.64 
(1)The Company’s fixed price basis swaps for natural gas are for the spread between the Waha Hub natural gas price and the Henry Hub natural gas price.
(2)The weighted average differential represents the amount of reduction to the WTI Cushing oil price and the Waha Hub natural gas price for the notional volumes covered by the basis swap contracts.

Puts
Put Spread
Settlement MonthSettlement YearType of ContractBbls/MMBtu Per DayIndexAverage
Strike Price		Average
Deferred Premium		Floor PriceShort Put Price
OIL
Jul. - Sep.
2026
Puts
55,000
WTI Cushing
$55.23$(1.11)$— $— 
Oct. - Dec.
2026
Puts
45,000
WTI Cushing
$50.00$(1.34)$— $— 
Jan. - Mar.
2027
Puts
40,000
WTI Cushing
$50.00$(1.39)$— $— 
Apr. - Jun.
2027
Puts
20,000
WTI Cushing
$50.00$(1.40)$— $— 
Jul. - Sep.
2027
Puts
10,000
WTI Cushing
$50.00$(1.44)$— $— 
Jul. - Sep.
2026
Basis Puts30,000WTI - Brent$(45.00)$(1.30)$— $— 
Oct. - Dec.
2026
Basis Puts30,000
WTI - Brent
$(45.00)$(1.48)$— $— 
Jul. - Sep.
2026
Put Spread
15,000
WTI Cushing
$—$— $50.00 $55.00 
Contingent Liability

The Company completed multiple acquisitions during 2024 with TWR IV, TWR IV SellCo Parent, LLC, Tumbleweed-Q Royalties, LLC, MC TWR Royalties, LP and MC TWR Intermediate, LLC. The terms of these acquisitions included provisions for contingent cash consideration based on the average price of WTI sweet crude oil prompt month futures contracts for the calendar year 2025 (the “2026 WTI Contingent Liability”), which resulted in an aggregate payment of $20 million in January 2026. The changes in fair value of the 2026 WTI Contingent Liability were recognized in “Gain (loss) on derivative instruments, net” on the Company’s condensed consolidated statements of operations.

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. Changes in the fair value of the Company’s derivative instruments are recognized in “Gain (loss) on derivative instruments, net” on the Company’s condensed consolidated statements of operations. See Note 11—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 and the net cash receipts (payments) on derivatives for the periods presented:

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025

(In millions)
Gain (loss) on derivative instruments, net:
Commodity contracts$— $(26)$18 $3 
2026 WTI Contingent Liability— (3)— — 
Total$— $(29)$18 $3 
Net cash receipts (payments) on derivatives:
Commodity contracts$16 $3 $36 $12