v3.26.3
Derivatives
 9 Months Ended
Sep. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
Commodity Derivatives 

The Company is exposed to commodity price risk, which impacts the predictability of its cash flows from the sale of oil, natural gas and NGL. On occasion, the Company has attempted to manage this risk on a portion of its forecasted oil, natural gas or NGL production sales through the use of commodity derivative contracts.

Historically, the Company has not designated any of its derivative contracts as hedges for accounting purposes. As applicable, if the Company has open derivative contracts, the Company has recorded such contracts at fair value with changes in derivative contract fair values recognized as a gain or loss on derivative contracts in the condensed consolidated income statements. Commodity derivative contracts were settled on a monthly basis, and the commodity derivative contract valuations were adjusted on a mark-to-market valuation basis quarterly.
Embedded Derivative

The Company determined that the Contingent Consideration associated with the August 2026 acquisition of certain producing assets and leasehold interests in the Cherokee Play of the Mid-Continent region meets the criteria for an embedded derivative. Therefore, the Company bifurcated the Contingent Consideration from the host contract and recognized it separately at fair value. The Contingent Consideration is marked-to-market each reporting period, with changes in fair value recognized in the (Gain) loss on derivative contracts line item in the condensed consolidated income statements. See “Note 5—Acquisitions” for additional information.

The following table summarizes derivative activity (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
(Gain) loss on commodity derivatives$4,914 $(2,364)$4,218 $(5,936)
(Gain) loss on Contingent Consideration1,478 — 1,478 — 
(Gain) loss on derivative contracts$6,392 $(2,364)$5,696 $(5,936)
Settlement gains (losses) on derivative contracts$1,055 $2,661 $338 $3,980 

Master Netting Agreements and the Right of Offset. As applicable, the Company historically has had master netting agreements with all of its commodity derivative counterparties and has presented its derivative assets and liabilities with the same counterparty on a net basis in the condensed consolidated balance sheets. As a result of the netting provisions, the Company's maximum amount of loss under commodity derivative transactions due to credit risk was limited to the net amounts due from its counterparties.

Because the Company did not designate any of its commodity derivative contracts as hedges for accounting purposes, changes in the fair value of the derivative contracts were recognized as gains and losses in the earnings of the relevant period. Changes in fair value were principally measured based on a comparison of future prices to the contract price at the end of the period and through the Black-Scholes or other similar valuation method in the case of options.
The following tables summarize (i) the Company's derivative contracts on a gross basis, (ii) the effects of netting assets and liabilities for which the right of offset exists based on master netting arrangements, (iii) the financial collateral, if any, associated with the Company’s commodity contracts, and (iv) the Company’s net derivative asset and liability positions as of September 30, 2026 and December 31, 2025 (in thousands):

September 30, 2026
Gross AmountsGross Amounts OffsetAmounts Net of OffsetFinancial CollateralNet Amount
Assets (Liabilities)
Derivative contracts - current$(2,846)$(1,243)$(1,603)$— $(1,603)
Contingent Consideration - current(2,598)— (2,598)— (2,598)
Total current derivatives(5,444)(1,243)(4,201)— (4,201)
Derivative contracts - non-current(179)— (179)— (179)
Contingent Consideration - non-current(977)— (977)— (977)
Total non-current derivatives(1,156)— (1,156)— (1,156)
Total$(6,600)$(1,243)$(5,357)$— $(5,357)

December 31, 2025
Gross AmountsGross Amounts OffsetAmounts Net of OffsetFinancial CollateralNet Amount
Assets
Derivative contracts - current
$3,130 $357 $2,773 $— $2,773 
Total$3,130 $357 $2,773 $— $2,773 
As of September 30, 2026, the Company's open commodity derivative contracts consisted of oil, natural gas, and NGL commodity derivative contracts as follows:

PeriodIndexDaily Volume
Weighted Average Price
Oil (Bbl)
Fixed Price Swaps
October 2026 - December 2026NYMEX WTI700$75.18
January 2027 - December 2027NYMEX WTI200$65.00
Producer Costless Collars
October 2026 - December 2026NYMEX WTI1,255
$62.57 Put /
$84.41 Call
Natural Gas (MMBtu)
Fixed Price Swaps
October 2026 - December 2026NYMEX Henry Hub14,400$4.18
Producer Costless Collars
October 2026 - December 2026NYMEX Henry Hub4,500
$3.35 Put /
$5.35 Call
NGL (Bbl)
Fixed Price Swaps
October 2026 - December 2026Mont Belvieu OPIS490$54.34

As of December 31, 2025, the Company's open commodity derivative contracts consisted of oil and natural gas commodity derivative contracts under which it will receive a fixed price for the contract and pay a floating market price to the counterparty over a specified period for a contracted volume. These commodity derivative contracts consisted of the following:

PeriodIndexDaily Volume
Weighted Average Price
Oil (Bbl)
Fixed Price SwapsJanuary 2026 - June 2026NYMEX WTI300$68.67
Natural Gas (MMBtu)
Fixed Price Swaps January 2026 - December 2026NYMEX Henry Hub 11,797$4.16
Producer Costless Collars January 2026 - December 2026 NYMEX Henry Hub4,500
$3.35 Put /
$5.35 Call