v3.26.1
Derivative Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments [Abstract]  
Derivative Instruments
Note 4 – Derivative Instruments

The Company utilizes commodity derivative instruments to reduce its exposure to crude oil, natural gas, and NGL price volatility for a portion of its estimated production from its proved, developed, producing oil and natural gas properties. As of June 30, 2026, the Company only had commodity swap contracts outstanding, which guarantee a fixed price on contracted volumes over specified time periods. However, in the future, the Company may utilize other types of derivative instruments including call and purchased options, put spreads, collars, and three-way collars. All of the Company’s commodity derivative counterparties are large financial institutions with investment-grade credit ratings. As such, the Company believes it does not have any significant credit risk associated with its counterparties and does not currently anticipate any non-performance from its counterparties.

As of June 30, 2026, the Company had the following outstanding crude oil and natural gas derivative contracts in place, which settle monthly and are indexed to NYMEX West Texas Intermediate, NYMEX Henry Hub, and Mount Belvieu OPIS, respectively:

   
Settling
July 1, 2026
through
December 31,
2026
    
Settling
January 1,
2027
through
December 31,
2027
    
Settling
January 1,
2028
through
December 31,
2028
    
Settling
January 1,
2029
through
December 31,
2029
  
Crude Oil Swaps:
                        
Notional volume (Bbls)
    
2,651,848
      
4,662,503
      
2,862,307
      
210,000
  
Weighted average price ($/Bbl)
  
$
63.09
    
$
62.51
    
$
62.17
    
$
61.57
  
Natural Gas Swaps:
                                
Notional volume (MMBtus)
    
7,584,322
      
14,082,126
      
5,606,357
      
400,000
  
Weighted average price ($/MMBtu)
  
$
4.08
    
$
4.08
    
$
4.02
    
$
4.11
  
Ethane Swaps:
                                
Notional volume (Bbls)
    
215,747
      
400,675
      
220,109
      
—
  
Weighted average price ($/Bbl)
  
$
11.22
    
$
10.70
    
$
9.96
    
$
—
  
Propane Swaps:
                                
Notional volume (Bbls)
    
293,113
      
522,684
      
199,160
      
—
  
Weighted average price ($/Bbl)
  
$
28.69
    
$
26.85
    
$
25.93
    
$
—
  
Iso Butane Swaps:
                                
Notional volume (Bbls)
    
41,114
      
74,572
      
35,088
      
—
  
Weighted average price ($/Bbl)
  
$
35.41
    
$
31.77
    
$
30.77
    
$
—
  
Normal Butane Swaps:
                                
Notional volume (Bbls)
    
103,276
      
184,140
      
74,903
      
—
  
Weighted average price ($/Bbl)
  
$
35.81
    
$
31.95
    
$
30.36
    
$
—
  
Pentane Plus Swaps:
                                
Notional volume (Bbls)
    
86,958
      
160,242
      
78,806
      
—
  
Weighted average price ($/Bbl)
  
$
55.12
    
$
53.31
    
$
52.81
    
$
—
  
The Company recognizes all of its derivative instruments at fair value as assets or liabilities on the accompanying condensed consolidated balance sheets. The Company has not designated any of its derivative instruments as hedges for accounting purposes; therefore, it presents aggregate net gains or losses resulting from changes in the fair values of its outstanding derivatives and aggregate net gains or losses resulting from the settlement of derivative instruments during the period as gain or loss on derivatives, net on the accompanying condensed consolidated statements of operations.

The Company typically has numerous hedge positions that span several time periods and often result in both fair value derivative asset and liability positions held with that counterparty. The Company has elected to net its derivative instrument fair values executed with the same counterparty, pursuant to the International Swaps and Derivatives Association, Inc. master agreements, which provide for the net settlement over the term of the contract and in the event of the default or termination of the contract.

The following tables present the gross and net fair values of the Company’s derivative instruments recognized on the condensed consolidated balance sheets for the periods presented:

   
June 30, 2026
  
   
Gross Amounts
Recognized
    
Gross Amounts
Offset in the
Condensed
Consolidated
Balance Sheet
    
Net Amounts
Presented on
the Condensed
Consolidated
Balance Sheet
  
   
(In thousands)
  
Current derivative assets
  
$
11,359
    
$
(11,359
)
  
$
—
  
Long-term derivative assets
  
$
7,254
    
$
(7,254
)
  
$
—
  
                         
Current derivative liabilities
  
$
(28,313
)
  
$
11,359
    
$
(16,954
)
Long-term derivative liabilities
  
$
(21,966
)
  
$
7,254
    
$
(14,711
)

   
December 31, 2025
  
   
Gross Amounts
Recognized
    
Gross Amounts
Offset in the
Condensed
Consolidated
Balance Sheet
    
Net Amounts
Presented on
the Condensed
Consolidated
Balance Sheet
  
   
(In thousands)
  
Current derivative assets
  
$
30,126
    
$
(1,314
)
  
$
28,812
  
Long-term derivative assets
  
$
26,852
    
$
(2,225
)
  
$
24,627
  
                         
Current derivative liabilities
  
$
(1,314
)
  
$
1,314
    
$
—
  
Long-term derivative liabilities
  
$
(2,225
)
  
$
2,225
    
$
—
  

The following table presents the components of the gain (loss) on derivatives, net reflected on the accompanying condensed consolidated statements of operations for the periods indicated:

   
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
   
2026
    
2025
    
2026
    
2025
  
   
(In thousands)
  
Cash (paid) received for derivative settlements, net:
                        
Crude oil
  
$
(34,146
)
  
$
4,150
    
$
(45,523
)
  
$
3,630
  
Natural gas
    
3,647
      
1,223
      
1,126
      
961
  
NGLs
    
(2,201
)
    
(429
)
    
(2,480
)
    
(429
)
Total cash (paid) received for derivative settlements, net:
  
$
(32,700
)
  
$
4,944
    
$
(46,877
)
  
$
4,162
  
                                 
Non-cash gain (loss) on derivatives:
                                
Crude oil
  
$
67,071
    
$
22,332
    
$
(83,503
)
  
$
23,406
  
Natural gas
    
3,259
      
3,375
      
5,625
      
2,185
  
NGLs
    
7,450
      
(2,501
)
    
(7,226
)
    
(2,501
)
Total non-cash gain (loss) on derivatives
   $
77,779
     $
23,206
     $
(85,104
)
   $
23,090
  
                                 
Total gain (loss) on derivatives, net
  
$
45,079
    
$
28,150
    
$
(131,981
)
  
$
27,252