v3.26.3
Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Financial Instruments [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 4. DERIVATIVE FINANCIAL INSTRUMENTS

 

Set forth below are the summarized amounts, terms and gross fair values of outstanding commodity derivative instruments as of June 30, 2026 (Successor):

 

    Volumes     Weighted
Average
Price		     Fair Value  
    (in Bbls)     ($ per Bbl)     (in thousands)  
Oil Swaps:                  
July - December 2026     553       60.39     $ (4,551 )
January - December 2027     1,043       94.44       28,014  
January - December 2028     884       63.15       (1,634 )
January - December 2029     755       67.55       2,119  
January - December 2030     672       64.94       798  
Thereafter     265       62.96       33  
Total     4,172               24,779  

 

    Volumes     Weighted
Average
Price		     Fair Value  
    (in MMBtu)     ($ per MMBtu)     (in thousands)  
Natural Gas Swaps:                  
July - December 2026     12,321       5.54     $ 26,405  
January - December 2027     22,493       4.18       15,549  
January - December 2028     21,416       3.55       (2,372 )
January - December 2029     18,718       3.58       (1,175 )
January - December 2030     17,539       3.55       58  
Thereafter     36,885       3.45       1,767  
Total     129,372             $ 40,232  

 

 

    Volumes     Basis
Differential		     Fair Value  
    (in MMBtu)     ($ per MMBtu)     (in thousands)  
Natural Gas Basis Swaps:                  
July - December 2026     12,354       (0.49 )   $ 1,330  
January - December 2027     20,253       (0.31 )     1,472  
January - December 2028     18,621       (0.43 )     (577 )
January - December 2029     7,397       (0.55 )     (1,162 )
Total     58,625               1,063  

 

    Volumes     Weighted
Average
Price		     Fair Value  
    (in Bbls)     ($ per Bbl)     (in thousands)  
Natural Gas Liquids Swaps:                  
July - December 2026     1,096       21.87     $ (5,902 )
January - December 2027     1,920       23.35       (5,274 )
January - December 2028     1,541       25.70       (5 )
January - December 2029     1,226       23.44       (435 )
January - December 2030     1,061       21.67       (1,156 )
Thereafter     255       20.26       (693 )
Total     7,099             $ (13,465 )

  

Set forth below are the summarized amounts, terms and gross fair values of outstanding commodity derivative instruments as of December 31, 2025 (Predecessor):

 

    Volumes     Weighted
Average
Price		     Fair Value  
    (in Bbls)     ($ per Bbl)     (in thousands)  
Oil Swaps:                  
January - December 2026     990       57.45     $ 395  
January - December 2027     902       58.22       698  
January - December 2028     422       56.67       (662 )
Total     2,314             $ 431  

 

    Volumes     Weighted
Average
Price		     Fair Value  
    (in MMBtu)     ($ per MMBtu)     (in thousands)  
Natural Gas Swaps:                  
January - December 2026     21,071       3.19     $ (11,117 )
January - December 2027     19,133       3.68       (3,676 )
January - December 2028     17,664       3.57       (2,267 )
January - December 2029     16,454       3.55       (899 )
January - December 2030     15,340       3.55       (783 )
Thereafter     7,314       3.63       852  
Total     96,976             $ (17,890 )

 

    Volumes     Basis
Differential		     Fair Value  
    (in MMBtu)     ($ per MMBtu)     (in thousands)  
Natural Gas Basis Swaps:                  
January - December 2026     21,071       (0.32 )   $ 6,807  
January - December 2027     18,944       (0.30 )     741  
Total     40,015             $ 7,548  

 

 

    Volumes     Weighted
Average
Price		     Fair Value  
    (in Bbls)     ($ per Bbl)     (in thousands)  
Natural Gas Liquids Swaps:                  
January - December 2026     1,894       22.10     $ (3,550 )
January - December 2027     1,671       22.69       (2,105 )
January - December 2028     1,295       25.66       1,367  
Total     4,860             $ (4,288 )

 

Below is a reconciliation of the gross open positions by commodity to the net open positions presented on the condensed consolidated balance sheet as of June 30, 2026 (Successor):

 

    Current     Noncurrent  
(in thousands)   Assets     Liabilities     Assets     Liabilities  
Commodity                        
Oil   $ 15,301     $ (4,826 )   $ 17,758     $ (3,454 )
Gas     46,152       (2,169 )     6,628       (9,316 )
NGL     294       (11,143 )     1,755       (4,371 )
Total   $ 61,747     $ (18,138 )   $ 26,141     $ (17,141 )
Effects of netting arrangements     (7,192 )     7,192       (15,083 )     15,083  
Total   $ 54,555     $ (10,946 )   $ 11,058     $ (2,058 )

 

Below is a reconciliation of the gross open positions by commodity to the net open positions presented on the condensed consolidated balance sheet as of December 31, 2025 (Predecessor):

 

    Current     Noncurrent  
(in thousands)   Assets     Liabilities     Assets     Liabilities  
Commodity                        
Oil   $ 2,056     $ (1,661 )   $ 793     $ (757 )
Gas     7,428       (11,738 )     3,691       (9,723 )
NGL     177       (3,727 )     2,326       (3,064 )
Total   $ 9,661     $ (17,126 )   $ 6,810     $ (13,544 )
Effects of netting arrangements     (9,661 )     9,661       (6,810 )     6,810  
Total   $ —     $ (7,465 )   $ —     $ (6,734 )

 

The Company has entered into derivative contracts with counterparties that the Company believes are creditworthy. All of the Company’s counterparties are investment grade and no collateral has been required. The Company’s maximum exposure to loss due to credit risk if all counterparties failed to perform is limited to the net fair value of derivative assets by counterparty as reflected on the condensed consolidated balance sheets.

  

For the three months ended June 30, 2026 (Successor) and the period from March 4, 2026 through June 30, 2026 (Successor), the Company incurred a realized gain of $6.8 million and $0.6 million, respectively, and an unrealized gain of $18.0 million and an unrealized loss of $8.9 million, respectively, on commodity derivatives, resulting in a total net gain of $24.8 million and a total net loss of $8.3 million, respectively.

 

For the period from January 1, 2026 through March 3, 2026 (Predecessor), the Company incurred a realized loss of $10.6 million and an unrealized loss of $17.3 million on commodity derivatives, resulting in a total net loss of $27.9 million.

 

For the three and six months ended June 30, 2025 (Predecessor), the Company incurred a realized loss of $7.1 million and $17.3 million, respectively, and an unrealized gain of $29.7 million and $21.4 million, respectively, on commodity derivatives, resulting in a total net gain of $22.6 million and $4.1 million, respectively.

 

Derivative Contract Modifications

 

Concurrent with the Business Combination, the Company entered into an amendment agreement with a counterparty to modify the strike price of certain natural gas derivative contracts. The Company modified the fixed price of these natural gas swap contracts with a commodity reference price of NYMEX as actively traded at the Closing Date. The Company paid $60.0 million in cash consideration to modify these commodity derivative contracts, which is reflected as a cash outflow from operating activities in the condensed consolidated statement of cash flows in the period from March 4, 2026 through June 30, 2026 (Successor).

 

Concurrent with the ABS III Notes issuance described in Note 7 — Debt, the Company entered into amendment agreements with two counterparties to modify the strike prices of certain existing commodity derivatives. The Company modified the fixed price of these natural gas swap contracts with a commodity reference price of NYMEX as actively traded at the Closing Date. The Company paid $35.0 million in cash consideration to modify these commodity derivative contracts, which is reflected as a cash outflow from operating activities in the condensed consolidated statement of cash flows for the period from March 4, 2026 through June 30, 2026 (Successor).