v3.26.1
Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments Not Designated as Hedging Instruments [Abstract]  
Derivative Financial Instruments
Note 8 - Derivative Financial Instruments
Summary of Oil, Gas, and NGL Derivative Contracts in Place
We regularly enter into commodity derivative contracts to mitigate a portion of our exposure to oil, gas, and NGL price volatility and location differentials, and the associated effect on cash flows. All commodity derivative contracts that we enter into are for other-than-trading purposes. Our commodity derivative contracts consist of price swap and collar arrangements for oil and gas production, and price swap arrangements for NGL production.
In a typical commodity swap agreement, if the agreed upon published third-party index price (“index price”) is lower than the swap price, we receive the difference between the index price and the agreed upon swap price. If the index price is higher than the swap price, we pay the difference. For collar arrangements, we receive the difference between an agreed upon index price and the floor price if the index price is below the floor price. We pay the difference between the agreed upon ceiling price and the index price if the index price is above the ceiling price. No amounts are paid or received if the index price is between the floor and ceiling prices.
We have entered into fixed price oil and gas basis swaps in order to mitigate exposure to adverse pricing differentials between certain industry benchmark prices and the actual physical pricing points where our production is sold. As of June 30, 2026, we had basis swap contracts with fixed price differentials between:
•NYMEX WTI and Argus WTI Midland (“WTI Midland”) for a portion of our Permian Basin oil production with sales contracts that settle at WTI Midland prices;
•NYMEX WTI and Argus WTI Houston Magellan East Houston Terminal (“WTI Houston MEH”) for a portion of our South Texas oil production with sales contracts that settle at WTI Houston MEH prices;
•NYMEX Henry Hub (“HH”) and Inside FERC (“IF”) Waha hub in West Texas (“Waha”) for a portion of our Permian Basin gas production with sales contracts that settle at IF Waha prices; and
•NYMEX Henry Hub and Colorado Interstate Gas (“CIG Rockies”) for a portion of our DJ Basin natural gas production with sales contracts that settle at CIG Rockies prices.
We have also entered into oil swap contracts to fix the differential in pricing between the NYMEX calendar month average and the physical crude oil delivery month (“Roll Differential”) in which we pay the periodic variable Roll Differential and receive a weighted-average fixed price differential. The weighted-average fixed price differential represents the amount of net addition (reduction) to delivery month prices for the notional volumes covered by the swap contracts.
As of June 30, 2026, we had commodity derivative contracts with terms through the second quarter of 2028 as summarized in the table below:
Contract Period
Third Quarter 2026Fourth Quarter 202620272028
Oil Derivatives (volumes in MBbl and prices in $ per Bbl):
Swaps
NYMEX WTI Volumes6,398 7,673 10,530 — 
Weighted-Average Contract Price$63.30 $61.22 $68.09 $— 
Collars
NYMEX WTI Volumes5,662 3,289 12,133 — 
Weighted-Average Floor Price$59.51 $58.66 $63.42 $— 
Weighted-Average Ceiling Price$69.09 $66.07 $72.07 $— 
Basis Swaps
WTI Midland-NYMEX WTI Volumes
975 1,140 2,194 — 
Weighted-Average Contract Price$0.99 $0.99 $1.02 $— 
WTI Houston MEH-NYMEX WTI Volumes
392 378 — — 
Weighted-Average Contract Price$1.97 $2.01 $— $— 
Roll Differential Swaps
NYMEX WTI Volumes4,047 719 — — 
Weighted-Average Contract Price$0.59 $1.08 $— $— 
Gas Derivatives (volumes in BBtu and prices in $ per MMBtu):
Swaps
NYMEX HH Volumes
16,937 13,696 38,164 — 
Weighted-Average Contract Price$4.07 $4.30 $4.03 $— 
IF Waha Volumes
3,813 1,067 4,603 5,460 
Weighted-Average Contract Price$2.35 $3.13 $3.64 $1.14 
Collars
NYMEX HH Volumes
21,905 27,352 20,661 — 
Weighted-Average Floor Price$3.48 $3.53 $3.72 $— 
Weighted-Average Ceiling Price$4.33 $4.67 $4.60 $— 
Basis Swaps
IF Waha-NYMEX HH Volumes
11,960 11,960 28,053 — 
Weighted-Average Contract Price$(1.31)$(1.31)$(0.77)$— 
CIG Rockies-NYMEX HH Volumes
11,960 11,960 7,300 — 
Weighted-Average Contract Price$(0.57)$(0.57)$(0.37)$— 
NGL Derivatives (volumes in MBbl and prices in $ per Bbl):
Swaps
OPIS Ethane Mont Belvieu Non-TET Volumes137 141 — — 
Weighted-Average Contract Price$11.71 $11.71 $— $— 
Derivative Assets and Liabilities Fair Value
Our commodity derivatives are measured at fair value and are included in the accompanying balance sheets as derivative assets and liabilities, with the exception of derivative instruments that meet the “normal purchase normal sale” exclusion. We do not designate our commodity derivative contracts as hedging instruments. The fair value of commodity derivative contracts at June 30, 2026, and December 31, 2025, was a net asset of $16 million and $85 million, respectively.
The following table details the fair value of commodity derivative contracts recorded in the accompanying balance sheets:
As of June 30, 2026As of December 31, 2025
(in millions)
Derivative assets:
Current assets$145 $83 
Noncurrent assets56 6 
Total derivative assets$201 $89 
Derivative liabilities:
Current liabilities$184 $2 
Noncurrent liabilities1 2 
Total derivative liabilities$185 $4 
Offsetting of Derivative Assets and Liabilities
As of June 30, 2026, and December 31, 2025, all derivative instruments held were subject to master netting arrangements with various financial institutions. In general, our agreements with counterparties provide for the offsetting of amounts payable or receivable, at the election of both parties, for transactions that settle on the same date and in the same currency. Our agreements also provide that in the event of an early termination, the counterparties have the right to offset amounts owed or owing under that and any other agreement with the same counterparty. Our accounting policy is to not offset these positions in our accompanying balance sheets.
The following table provides a reconciliation between the gross assets and liabilities reflected in the accompanying balance sheets and the potential effects of master netting arrangements on the fair value of our commodity derivative contracts:
Derivative Assets as ofDerivative Liabilities as of
June 30,
2026		December 31, 2025June 30,
2026		December 31, 2025
(in millions)
Gross amounts presented in the accompanying balance sheets$201 $89 $(185)$(4)
Amounts not offset in the accompanying balance sheets(154)(4)154 4 
Net amounts$47 $85 $(31)$— 
We recognize all gains and losses from changes in commodity derivative fair values immediately in earnings rather than deferring such amounts in accumulated other comprehensive income (loss). We had no commodity derivative contracts designated as hedging instruments as of June 30, 2026, and December 31, 2025. Refer to Note 9 - Fair Value Measurements for more information regarding our derivative instruments, including our valuation techniques.
The following table summarizes the commodity components of the net derivative settlement gain (loss), and the net derivative (gain) loss line items presented within the accompanying unaudited condensed consolidated statements of cash flows (“accompanying statements of cash flows”) and the accompanying statements of operations, respectively:
For the Three Months Ended
June 30,		For the Six Months Ended
June 30,
2026202520262025
(in millions)
Net derivative settlement (gain) loss:
Oil contracts$340 $(21)$410 $(24)
Gas contracts(119)(19)(159)(26)
NGL contracts(1)— (1)2 
Total net derivative settlement (gain) loss$220 $(40)$250 $(47)
Net derivative (gain) loss:
Oil contracts$(238)$(55)$561 $(52)
Gas contracts(31)(22)(243)(10)
NGL contracts(3)(2)107 — 
Total net derivative (gain) loss$(272)$(78)$425 $(61)
____________________________________________
Note: Prior year amounts may not calculate due to rounding.
Credit Related Contingent Features
We only enter into derivative contracts with members of our Credit Agreement lender group and as of June 30, 2026, all of our derivative counterparties were members of our lender group. Under the Credit Agreement, we are required to provide mortgage liens on assets having a value equal to at least 85 percent of the total PV-9, as defined in the Credit Agreement, of our proved oil and gas properties evaluated in the most recent reserve report. Collateral securing indebtedness under the Credit Agreement also secures our derivative agreement obligations.