v3.26.1
Derivative Contracts
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Contracts Derivative Contracts
The Company uses derivative contracts to reduce exposure to fluctuations in commodity prices. These transactions are in the form of fixed price swaps, basis swaps and costless collars. While the use of these instruments limits the downside risk of adverse price changes, their use may also limit future revenues from favorable price changes. The Company does not intend to hold or issue derivative financial instruments for speculative trading purposes and has elected not to designate any of its derivative instruments for hedge accounting treatment.
Under fixed price swap contracts, the Company receives a fixed price for the contract and pays a floating market price to the counterparty over a specified period for a contracted volume. The fixed-price payment and the floating-price payment are netted, resulting in a net amount due to or from the counterparty. Crude oil derivative contracts are indexed and settled based on NYMEX WTI pricing. Natural gas derivative contracts are indexed and settled based on NYMEX Henry Hub (“NYMEX HH”) pricing.
The Company reports the fair value of derivatives on the balance sheet in derivative contracts assets and derivative contracts liabilities as either current or noncurrent based on the timing of expected future cash flows of individual trades. See Note 8 for additional information regarding fair value measurements.
The following table summarizes the open fixed price swap positions as of June 30, 2026, related to oil production:
PeriodIndexVolume
(Mbbl)		Weighted
Average
Fixed Price
Remaining 2026NYMEX WTI1,549 $64.51 
2027NYMEX WTI2,415 63.94 
2028NYMEX WTI773 65.58 
The following table summarizes the open fixed price swap positions as of June 30, 2026, related to natural gas production:
PeriodIndexVolume
(Bbtu)		Weighted
Average
Fixed Price
Remaining 2026NYMEX HH18,691 $3.52 
2027NYMEX HH15,278 3.50 
2028NYMEX HH3,480 3.69 
2029NYMEX HH4,544 3.43 
Each two-way costless collar has a set floor and ceiling price for the hedged production. They are settled monthly based on differences between the floor and ceiling prices specified in the contract and the referenced settlement price. If the applicable monthly price indices are outside of the ranges set by the floor and ceiling prices in the collar contracts, the Company will cash-settle the difference with the hedge counterparty. When the referenced settlement price is less than the floor price in the contract, the Company receives an amount from the counterparty based on the price difference multiplied by the hedged contract volume. Similarly, when the referenced settlement price exceeds the ceiling price specified in the contract, the Company pays the counterparty an amount based on the price difference multiplied by the hedged contract
volume. No payment is due from either party if the referenced settlement price is within the range set by the floor and ceiling prices. Crude oil derivative contracts are indexed and settled based on NYMEX WTI pricing.
The following table summarizes the open costless collar positions as of June 30, 2026, related to oil production:
PeriodIndexVolume
(Mbbl)		Weighted
Average
Floor Price		Weighted
Average
Ceiling Price
Remaining 2026NYMEX WTI368 $60.00 $78.52 
2027NYMEX WTI181 62.50 71.25 
In addition, the Company has entered into oil basis swap positions. These instruments are arrangements that guarantee a fixed price differential to Argus WTI Midland TMA from a specified delivery point. The Company receives the fixed price differential and pays the floating market price differential to the counterparty for the hedged commodity.
The following table summarizes the open basis swap positions as of June 30, 2026, related to oil production:
PeriodIndexVolume
(Mbbl)		Weighted
Average
Fixed Price
Remaining 2026Argus TMA276 $1.25 
Balance Sheet Presentation.    The Company has master netting agreements with all of its derivative counterparties and presents its derivative assets and liabilities with the same counterparty on a net basis on the balance sheet. The following table presents the gross amounts of recognized derivative assets, the amounts that are subject to offsetting under master netting arrangements and the net recorded fair values as recognized on the balance sheet (in thousands):

June 30,
2026		December 31,
2025
Derivative contracts – current, gross
$4,040 $43,974 
Netting arrangements
(3,064)(1,468)
Derivative contracts – current, net
$976 $42,506 
Derivative contracts – long-term, gross
$227 $12,519 
Netting arrangements
— (27)
Derivative contracts – long-term, net
$227 $12,492 
The following table presents the gross amounts of recognized derivative liabilities, the amounts that are subject to offsetting under master netting arrangements and the net recorded fair values as recognized on the balance sheet (in thousands):

June 30,
2026		December 31,
2025
Derivative contracts – current, gross
$(8,499)$(1,468)
Netting arrangements
3,064 1,468 
Derivative contracts – current, net
$(5,435)$— 
Derivative contracts – long-term, gross
$(5,812)$(2,989)
Netting arrangements
— 27 
Derivative contracts – long-term, net
$(5,812)$(2,962)
Gains and Losses.    The following table presents the settlement and mark-to-market (“MTM”) gains and losses presented as a loss or gain on derivatives in the statement of operations for the three and six months ended June 30, 2026 and 2025 (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Settlements of oil derivatives
$(24,611)$6,640 $(29,869)$7,548 
Settlements of natural gas derivatives6,405 388 18,533 1,127 
MTM gains (losses) on oil derivatives, net
40,707 15,401 (59,803)16,196 
MTM gains (losses) on natural gas derivatives, net984 33,150 (2,275)(9,985)
Total gains (losses) on derivative contracts$23,485 $55,579 $(73,414)$14,886