The Company follows the full cost method of accounting to account for its crude oil and natural gas operations, whereby all costs related to the exploration and development of crude oil and natural gas properties are capitalized into a separate full cost pool for each country in which it operates. Such costs include land acquisition costs, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling directly related to acquisition, and exploration activities. Internal costs that are capitalized are directly attributable to acquisition, exploration and development activities and do not include costs related to production, general corporate overhead or similar activities. Costs associated with production and general corporate activities are expensed in the period incurred.

Under the full cost method of accounting, the Company is required to perform a ceiling test, each quarter, for each full cost pool. The test determines a limit, or ceiling, for each full cost pool, on the book value of the Company’s oil and natural gas properties. For each full cost pool, net capitalized costs are limited to the lower of unamortized cost net of deferred income taxes, or the full cost ceiling. As a result of its ceiling tests, the Company recorded a non-cash impairment charge of approximately $268.3 million in the six months ended June 30, 2026 for the United States full cost pool. No impairment charges were recorded in the three months ended June 30, 2026. Conversely, the Company recorded a non-cash impairment charge of approximately $115.6 million in the three and six months ended and June 30, 2025.

Average commodity prices used in our ceiling test calculations have fluctuated significantly in recent quarters. If said prices trend downward, and/or if our proved reserves decrease significantly in future months, the present value of the Company’s future net revenues could decline, which could trigger the need for the Company to record an additional non-cash ceiling test impairment of its oil and natural gas property costs in future periods.

The book value of the Company’s crude oil and natural gas properties consists of all acquisition costs, drilling costs and other associated capitalized costs. Acquisitions are accounted for as purchases and, accordingly, the results of operations are included in the accompanying condensed consolidated statements of operations from the closing date of the acquisition. Acquired assets and liabilities assumed are recorded based on their estimated fair value at the time of the acquisition.

In addition to the closing of the Utica Acquisition and the Duvernay Acquisition, as defined below, during the three and six months ended June 30, 2026, the Company acquired oil and natural gas properties through a number of smaller independent transactions for a total of $44.7 million and $88.3 million, respectively, inclusive of related development costs.

In February 2026, the Company completed its acquisition of certain upstream and midstream assets in the state of Ohio from Antero Resources Corporation and certain affiliated entities (collectively, “Antero”), effective as of July 1, 2025 (together, the “Utica Acquisition”). At closing, the Company acquired a 40% undivided working interest in the assets sold by Antero, with Infinity Natural Resources, LLC, an unaffiliated third party, acquiring the other 60% and becoming the operator of the acquired assets.

The total consideration paid to the seller at closing, net of customary purchase price adjustments, and net to the Company, was $464.6 million in cash, a portion of which was funded by a $58.8 million acquisition deposit paid in December 2025 and recorded in Other Noncurrent Assets, Net as of December 31, 2025.

The Company accounted for its Utica Acquisition as a business combination. Accordingly, transaction costs of approximately $6.7 million were included in general and administrative expense in the Company’s condensed consolidated statements of operations. The results of operations from the date of the Utica Acquisition through June 30, 2026 represented approximately $16.7 million of revenue and $9.3 million of income from operations. The following table reflects the fair value of the net assets and liabilities as of the closing date of the acquisition:


	(In thousands)
Fair value of net assets:
Proved oil and natural gas properties	$	325,941
Unproved oil and natural gas properties	140,029
Total assets acquired	465,970
Asset retirement obligations	(1,334)
Net assets acquired	$	464,636

Fair value of consideration paid for net assets:
Cash consideration	$	464,636

Total fair value of consideration transferred	$	464,636

In June 2026, the Company completed its acquisition of certain oil and natural gas properties located in the Duvernay East Shale Basin of Alberta, Canada, from Parallax Energy Operating, Inc. (“Parallax”), effective as of April 1, 2026 (the “Duvernay Acquisition”). At closing, the Company acquired a 25% undivided working interest in the assets sold by Parallax, who continued as operator. NOG Energy Canada, Ltd acted as the purchaser of the assets.

The total consideration paid at closing, net of customary purchase price adjustments, was approximately $262.1 million, which included $171.2 million in cash, 3,689,413 shares of the Company’s common stock, par value $0.001 per share, with a total

The Company accounted for its Duvernay Acquisition as a business combination. Accordingly, transaction costs of approximately $7.6 million were included in general and administrative expense in the Company’s condensed consolidated statements of operations. The results of operations from the date of the Duvernay Acquisition through June 30, 2026 represented approximately $7.9 million of revenue and $7.4 million of income from operations. The following table reflects the fair value of the net assets and liabilities as of the closing date of the acquisition:


	(In thousands)
Fair value of net assets:
Proved oil and natural gas properties	$	205,309
Unproved oil and natural gas properties	57,327
Total assets acquired	262,636
Asset retirement obligations	(498)
Net assets acquired	$	262,138

Fair value of consideration paid for net assets:
Cash consideration	$	171,243
Issuance of common stock	81,388
Contingent consideration	9,507
Total fair value of consideration transferred	$	262,138

The amount of additional contingent consideration payable by the Company, if any, is payable in January 2028. The payout amount is dependent upon the NYMEX WTI oil price reaching an average of $72.50 per Bbl during the period from April 1, 2026 to December 31, 2027. The fair value of the contingent consideration liability was approximately $9.5 million at the acquisition date. Upon remeasurement, the fair value of the contingent consideration was approximately $6.6 million at June 30, 2026. Accordingly, a remeasurement gain of $2.7 million was recorded in the condensed consolidated statements of operations.

During 2025, the Company acquired oil and natural gas properties through a number of smaller independent transactions for a total of $173.5 million, inclusive of related development costs.

In April 2025, the Company completed its acquisition of certain oil and natural gas properties, interests and related assets in the Midland Permian basin from a private seller, effective June 1, 2024. The total consideration paid to the seller at closing, net to the Company, was approximately $61.7 million in cash, a portion of which was funded by a $4.0 million acquisition deposit paid in February 2025.

In August 2025, the Company completed its acquisition of certain oil and natural gas properties, interests and related assets in the Uinta basin from a private seller, effective July 1, 2025. The total consideration paid to the seller at closing, net to the Company, was approximately $98.3 million in cash, a portion of which was funded by a $9.8 million acquisition deposit paid in June 2025.

The following summarized unaudited pro forma consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 provides summarized information for the acquisitions accounted for as business combinations. The information provided assumes that the acquisitions accounted for as business combinations occurred as of January 1, 2025.

The Company prepared the following summarized unaudited pro forma financial results for comparative purposes only. The summarized unaudited pro forma information may not be indicative of the results that would have occurred had the Company completed the acquisitions as of January 1, 2025, or that would be attained in the future.


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2026		2025		2026		2025
Total Revenues	$	767,946	$	752,071	$	807,043	$	1,407,916
Net Income (Loss) from Operations	370,763		205,745		(256,779)		471,332

From time-to-time the Company may divest assets. In addition, the Company may trade leasehold interests with operators to balance working interests in spacing units to facilitate and encourage a more expedited development of the Company’s acreage.

All oil and natural gas properties that are not classified as proved properties are considered unproved properties and, thus, the costs associated with such properties are not subject to depletion until the properties are evaluated for reserves. Once a property is evaluated, all associated acreage and drilling costs are subject to depletion.

The Company historically has acquired unproved properties by purchasing individual or small groups of leases directly from mineral owners, landmen, or lease brokers, which leases historically have not been subject to specified drilling projects, and by purchasing lease packages in identified project areas controlled by specific operators. The Company generally participates in drilling activities on a heads up basis by electing whether to participate in each well on a well-by-well basis at the time wells are proposed for drilling.

The Company believes that the majority of its unproved property will be evaluated, and thus the related costs will become subject to depletion within the next five years. The timing by which all unproved properties will become subject to depletion will be dependent upon the timing of future drilling activities and delineation of its reserves.

Capitalized costs associated with evaluated leasehold costs, which includes leases that have expired or have been deemed uneconomic, and capitalized costs related to properties having proved reserves, plus the estimated future development costs and asset retirement costs, are depleted and amortized using the unit-of-production method. Under this method, depletion is calculated at the end of each period by multiplying total production for the period by a depletion rate. The depletion rate is determined by dividing the total unamortized cost base plus future development costs by net equivalent proved reserves at the beginning of the period. The costs of unproved properties are withheld from the depletion base until such time that they are evaluated.

When unproved properties are evaluated, their cost is added to costs subject to depletion and full cost ceiling calculations. For the three months ended June 30, 2026 and 2025, unproved properties of $6.6 million and $3.8 million, respectively, were transferred to evaluated leasehold costs. For the six months ended June 30, 2026 and 2025, unproved properties of $14.1 million and $5.6 million, respectively, were transferred to evaluated leasehold costs.