v3.26.1
FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis

As discussed in Note 11—Fair Value Measurements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, certain assets and liabilities are reported at fair value on a recurring basis on the Company’s condensed consolidated balance sheets, including the Company’s commodity derivative instruments and in 2025, the 2026 WTI Contingent Liability.

The fair values of the Company’s commodity derivative contracts are measured internally using established commodity futures price strips for the underlying commodity provided by a reputable third-party, the contracted notional volumes and time to maturity. The net amounts are classified as current or noncurrent based on their anticipated settlement dates. The fair value of the 2026 WTI Contingent Liability was estimated using observable market data and a Monte Carlo pricing model, which are considered Level 2 inputs in the fair value hierarchy.
The following tables provide (i) the condensed consolidated balance sheet classification where the Company’s commodity derivative instrument assets and liabilities and for 2025, the 2026 WTI Contingent Liability are recorded, (ii) fair value measurement information, (iii) the gross amounts of recognized assets and liabilities, (iv) the amounts offset under master netting arrangements with counterparties, and (v) the resulting net amounts presented in the Company’s condensed consolidated balance sheets as of June 30, 2026, and December 31, 2025:

As of June 30, 2026
Balance Sheet ClassificationLevel 1Level 2Level 3Total Gross Fair ValueGross Amounts Offset in Balance SheetNet Fair Value Presented in Balance Sheet
(In millions)
Assets:
Prepaid expenses and other current assets$— $26 $— $26 $(17)$9 
Other assets$— $6 $— $6 $(2)$4 
Liabilities:
Other current liabilities$— $27 $— $27 $(17)$10 
Other long-term liabilities$— $2 $— $2 $(2)$— 

As of December 31, 2025
Balance Sheet ClassificationLevel 1Level 2Level 3Total Gross Fair ValueGross Amounts Offset in Balance SheetNet Fair Value Presented in Balance Sheet
(In millions)
Assets:
Prepaid expenses and other current assets$— $37 $— $37 $(9)$28 
Liabilities:
Other current liabilities$— $9 $— $9 $(9)$— 
Accrued liabilities (2026 WTI Contingent Liability)$— $20 $— $20 $— $20 
Other long-term liabilities$— $7 $— $7 $— $7 

Assets and Liabilities Not Recorded at Fair Value

The following table provides the fair value of financial instruments that are not recorded at fair value in the condensed consolidated balance sheets:

June 30, 2026December 31, 2025
Carrying ValueFair ValueCarrying ValueFair Value
(In millions)
Debt
$1,678 $1,708 $2,186 $2,233 

The fair values of the Revolving Credit Facility and at December 31, 2025, the Term Loan, approximate their carrying values based on borrowing rates available to the Company for bank loans with similar terms and maturities and are classified as Level 2 in the fair value hierarchy. The fair values of the Guaranteed Senior Notes were determined using the quoted market price at each period end, a Level 1 classification in the fair value hierarchy.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis in certain circumstances. These assets and liabilities can include mineral and royalty interests acquired in asset acquisitions and subsequent write-downs of the Company’s proved oil and natural gas properties to fair value when they are impaired or held for sale.
Fair Value of Financial Assets

The Company has other financial instruments consisting of cash and cash equivalents, royalty income receivables, income tax receivables, certain prepaid expenses and other current assets, accounts payable, accrued liabilities and income taxes payable. The carrying value of these instruments approximates their fair values because of the short-term nature of the instruments.