Note 5. Accounts Receivable

Accounts receivable primarily consist of trade receivables related to crude oil sales and transportation services and are recorded net of an allowance for expected credit losses. The Company evaluates the collectability of accounts receivable on an ongoing basis based on historical experience, customer creditworthiness, and current economic conditions. The allowance for expected credit losses is reviewed on a periodic basis, and balances are written off when deemed uncollectible.

During the six months ended June 30, 2026, the Company recorded an allowance for expected credit losses related to certain customer receivable balances based on management’s assessment of collectability and current economic conditions.

Accounts receivable consisted of the following:

The balance of related-party receivables is due from entities affiliated with the Company’s Chief Executive Officer. During the three and six months ended June 30, 2026, amounts due under related-party commercial agreements were offset against amounts payable to Jorgan Development, LLC pursuant to existing offset arrangements between the parties. As a result of such offsets and related activity, the Company’s net position with the affiliated entities transitioned from a payable position to a receivable position during the six months ended June 30, 2026. As of June 30, 2026, related-party receivables totaled approximately $10.7 million, compared with approximately $1.4 million as of December 31, 2025.