Predecessor Credit Facility

On April 4, 2024, certain subsidiaries of the Predecessor entered into a 5-year financing agreement that included a $72.0 million term loan (the “First Term Loan”) and a revolving credit facility with a maximum borrowing base of $5.0 million, both of which mature on April 4, 2029 (as amended, the “Predecessor Credit Facility”). The Predecessor Credit Facility is fully and unconditionally guaranteed by the Company. Borrowings under the Predecessor Credit Facility bear interest at the Secured Overnight Financing Rate (“SOFR”), plus the applicable margin or certain reference rate, plus the applicable margin, which is set at 8.0% - 8.5% depending on the applicable leverage ratio for the most recent four consecutive quarters. Additionally, a commitment fee of 0.5% applies to undrawn amounts on the revolving credit facility. Borrowings under the Predecessor Credit Facility are secured by a first priority lien and security interest in substantially all assets of the Company. Principal amounts borrowed under the Predecessor Credit Facility may be repaid early with prepayment penalties varying by year, beginning at 3% and stepping down annually to 1% in the fifth year of the Predecessor Credit Facility. Any principal amounts outstanding on the maturity date, April 4, 2029, become due and payable on such date.

In connection with the Predecessor Credit Facility issuance, the Company additionally issued warrants exercisable for an aggregate of 1,001 Common Units (“April 2024 Warrants”), to designated holders. Each holder received the right to acquire Common Units as set forth in the Warrant Agreement. The April 2024 Warrants may be exercised upon (i) an event of default under the term loan agreement or (ii) an adjustment event, and expire ten years from the original issuance date. Because the warrants included a variable settlement feature, the Company concluded the April 2024 Warrants were not indexed to the Company’s own equity and classified them as liabilities. The Company determined the fair value of the April 2024 Warrants at grant date and as of December 31, 2024 to be de minimis. Fair value estimates involve significant assumptions and are classified as Level 3 in the fair value hierarchy.

Interest is payable monthly, with principal payments on the term loan due quarterly, based on the following percentages of the original principal: 1.25% from September 30, 2024 through June 30, 2025; 2.50% from September 30, 2025 through June 30, 2027; and 3.75% from September 30, 2027 through maturity. All remaining principal and accrued interest are due at maturity.

On February 28, 2025, the Company amended its Predecessor Credit Facility, resulting in an increased maximum borrowing base of $7.5 million on its revolving credit facility. Financing costs incurred related to the amendment of approximately $0.1 million were added to the principal balance as paid-in-kind interest. On April 14, 2025, the Company further amended the Predecessor Credit Facility (“April 2025 Amendment”), resulting in an additional $204 million Term Loan (the “Second Term Loan”). The April 2025 Amendment adjusted the amount and timing of the quarterly principal payments due for the First and Second Term loans as follows: 0.3125% from June 30, 2025 through March 31, 2026; 0.625% from June 30, 2026 through March 31, 2027; 0.9375% from June 30, 2027 through March 31, 2028; and 1.25% from June 30, 2028 through maturity. Additionally, the stepped down prepayment penalties were modified to start at 5.0% and stepping down annually to 4.0%, 2.0%, 1.0%, and zero after year 5. All remaining principal and accrued interest on both the First and Second Term Loan are due at maturity on April 4, 2029.

In connection with the April 2025 Amendment, the Company (i) issued new warrants to a new creditor (the “April 2025 Warrants”) and (ii) modified the terms of the outstanding April 2024 Warrants. The net effect of the issuance and modification reduced the total number of warrants outstanding from 1,001 to 900. The amendment additionally removed the variable settlement feature from the April 2024 Warrants. As a result, both the amended April 2024 Warrants and the April 2025 Warrants met the requirements for equity classification under ASC 815-40. Accordingly, on April 14, 2025, the Company reclassified the April 2024 Warrant liability to additional paid-in capital. The April 2025 Warrants were allocated a value of approximately $0.8 million, which was recorded within additional paid-in-capital, with a corresponding debt discount.

The Company assessed the debt amendment and modified April 2024 Warrants under ASC 470‑50 and concluded that the terms of the new debt are substantially different from the old debt (including the present value of cash flows test exceeding 10%), resulting in extinguishment accounting. Accordingly, the Company derecognized the carrying amount of the old debt and recognized an estimated loss on extinguishment of approximately $70.0 million, which reflects the difference between the carrying amount of the exchanged debt (including unamortized discounts and deferred financing costs of approximately $2.8 million) and the fair value of the new debt, plus fees paid to lenders of approximately $5.6 million and incremental value transferred to the warrantholders of approximately $17.6 million. The $44.1 million premium associated with the debt is primarily attributable to the related party nature of the debt, resulting in a higher interest rate over current market rates. This premium was amortized over the remaining term of the Predecessor Credit Facility utilizing an effective interest rate of approximately 8.2% until it was extinguished during the second quarter of 2026.

The Company evaluated the prepayment features embedded in the Predecessor Credit Facility which require the debt to be prepaid upon the occurrence of certain events, including specified asset sales and changes in control, under ASC 815, Derivatives and Hedging (“ASC 815”). These features represent embedded derivatives that are not clearly and closely related to the host debt. However, the Company has concluded that these embedded derivatives have no fair value at December 31, 2025, and therefore no separate embedded derivative liability has been recorded in the accompanying condensed consolidated financial statements.

The Predecessor Credit Facility interest rate was 12.4% as of December 31, 2025.

On April 1, 2026, the Predecessor amended the Predecessor Credit Facility, resulting in a $70.0 million incremental term loan and associated debt discount and debt issuance costs of approximately $2.4 million (the “Intrepid Term Loan”), with a maturity date of December 31, 2027. The Intrepid Term Loan requires quarterly principal payments (1.25% of original principal) beginning on December 31, 2026. Prepayment of the Intrepid Term Loan is allowed; however, in the case of a partial prepayment, such partial prepayment must first be applied to the First Term Loan and the Second Term Loan before it can be applied to the Intrepid Term Loan. The Intrepid Term Loan bears interest at SOFR, plus the applicable margin or certain reference rate, which is set at 8.25%-8.75% depending on the applicable leverage ratio for the most recent four consecutive quarters. The Predecessor evaluated the amendment and concluded the change in terms did not result in a significant change in the economics of the debt and thus will be accounted for as a debt modification and not an extinguishment of the debt. As such, the related financing costs of $2.1 million will be recorded as additional debt issuance costs and will be amortized over the term of the Predecessor Credit Facility. Additionally, $0.3 million of third party fees will be capitalized. In connection with the Hydrosource Distribution, the Intrepid Term Loan was distributed to Hydrosource Midstream. As such, the Intrepid Term Loan was never an obligation of the Company. Refer to Note 1 – The Company – Hydrosource Distribution for more information on the Hydrosource Distribution.

On June 3, 2026, the Company repaid in full all outstanding borrowings under the Predecessor Credit Facility with a cash payment of approximately $269.1 million, funded with proceeds from the IPO. The payment consisted of approximately $258.1 million of outstanding principal, a prepayment premium of approximately $10.6 million, and approximately $0.4 million of accrued interest and fees.

The Company accounted for the repayment as an extinguishment of debt under ASC 470‑50. At the date of repayment, the debt had a net carrying amount of approximately $289.0 million, including approximately $30.9 million of unamortized debt issuance premium, which was derecognized. The Company recognized a pre‑tax gain on extinguishment of approximately $20.3 million, measured as the excess of the net carrying amount over the reacquisition price of approximately $268.7 million (principal plus prepayment premium). The prepayment premium was treated as part of the reacquisition price and reduced the gain rather than being recognized as interest expense; accrued interest of approximately $0.4 million was recognized as interest expense through the repayment date.

EagleRock Credit Facility.

On May 4, 2026, OpCo entered into a credit agreement (the “Credit Facility”) with JPMorgan Chase Bank, N.A. as administrative agent, and the lenders party thereto. The Effective Date (as defined in the Credit Facility) of the Credit Facility was June 8, 2026. The Credit Facility provides for a senior secured revolving credit facility in an aggregate principal amount of up to $200.0 million, including a $10.0 million letter of credit sublimit, together with the ability to request increases in the commitments of up to an additional $100.0 million; provided that any such request for an increase must be in a minimum amount of $25.0 million and is limited to a maximum of four such requests. The Credit Facility and all borrowings thereunder will mature on June 8, 2031. Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the borrower’s option, the Term SOFR Rate (as defined in the Credit Facility) or Daily Simple SOFR (as defined in the Credit Facility), plus an applicable margin ranging from 2.25% to 3.00%, depending on OpCo’s Net Total Leverage Ratio (as defined in the Credit Facility). The Credit Facility includes a commitment fee on undrawn amounts ranging from 0.375% to 0.50%.

The Credit Facility contains customary affirmative and negative covenants, as well as financial covenants requiring maintenance of a minimum Interest Coverage Ratio of 2.75:1.00 and a maximum Net Total Leverage Ratio of 3.50:1.00 (or 4.00:1.00 following a Material Permitted Acquisition (as defined in the Credit Facility)), and customary events of default. As of June 30, 2026, the Credit Facility was undrawn, with no letters of credit outstanding. The Company was in compliance with all covenants as of June 30, 2026.

The Level 3 fair value of long-term debt as of December 31, 2025 was approximately $330.0 million. The disclosed fair value of debt is determined primarily utilizing an income approach.

For the three months ended June 30, 2026, the total interest expense related to long-term debt was approximately $5.1 million, inclusive of $6.6 million of coupon interest expense, net of amortization of net debt premiums and issuance costs of approximately $1.5 million. Interest expense for the six months ended June 30, 2026 was comprised of approximately $14.9 million of coupon interest and net amortization of debt premium and issuance costs of $4.0 million. For the three months ended June 30, 2025, interest expense related to long-term debt of approximately $6.1 million includes approximately $8.2 million of coupon interest and amortization of debt discounts and issuance costs of approximately $2.1 million. Interest expense for the six months ended June 30, 2025 was comprised of approximately $10.7 million of coupon interest and net amortization of debt premium and issuance costs of $2.0 million.

As of June 30, 2026 there was approximately $200.0 million of available borrowing capacity related to the Credit Facility. As of December 31, 2025, there was approximately $0.5 million of available borrowing capacity related to the Predecessor Credit Facility.