Quarterly report [Sections 13 or 15(d)]

FINANCIAL INSTRUMENTS

v3.25.2
FINANCIAL INSTRUMENTS
6 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
FINANCIAL INSTRUMENTS

NOTE 2 FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities, derivative instruments and debt. Except for derivative instruments and debt, the carrying amount of the Company’s financial instruments approximates fair value due to the short-term, highly liquid nature of these instruments.

Derivative Instruments

The following table reflects the contracted volumes and weighted average prices under the terms of the Company’s open costless collar contracts as of June 30, 2025:

Average

Daily

    

Total

    

Weighted

    

Weighted

Period

    

Volumes

Volumes

Floor Price

Ceiling Price

Natural Gas (Henry Hub)

(Mmbtu) (1)

(Mmbtu)

($/Mmbtu)

($/Mmbtu)

July 2025 - Dec 2025

70,000

12,880,000

$

4.02

$

5.32

Oil (WTI)

(Bbls) (2)

(Bbls)

($/Bbls)

($/Bbls)

July 2025 - Dec 2025

2,000

368,000

$

63.00

$

77.25

(1)

Mmbtu – Million British Thermal Units

(2)

Bbls – barrels of oil, condensate or NGLs

The fair value of the Company’s derivative financial instruments was recorded in the Condensed Consolidated Balance Sheets as follows (in thousands):

    

June 30, 

December 31, 

2025

2024

Prepaid expenses and other current assets

$

8,985

$

868

Other assets

 

 

4,150

Accrued liabilities

 

1,322

 

3,731

The Company measures the fair value of its derivative instruments on a recurring basis by applying the income approach, using models with inputs that are classified within Level 2 of the valuation hierarchy. The income approach converts expected future cash flows to a present value amount based on market expectations. The inputs used for the fair value measurement of derivative financial instruments are the exercise price, the expiration date, the settlement date, notional quantities, the implied volatility, the discount curve with spreads and published commodity future prices.

The impact of commodity derivative contracts on the Condensed Consolidated Statements of Operations were as follows (in thousands):

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2025

    

2024

    

2025

    

2024

Realized gain (1)

$

(9,493)

$

(364)

$

(5,854)

$

(4,119)

Unrealized (gain) loss

(2,554)

2,738

(3,436)

1,616

Derivative (gain) loss, net

$

(12,047)

$

2,374

$

(9,290)

$

(2,503)

(1) The three and six months ended June 30, 2025 include $4.3 million related to the monetization of the Company’s natural gas put contracts.

Debt

The following table presents the net values and estimated fair values of the Company’s debt (in thousands):

    

June 30, 2025

    

December 31, 2024

Net Value

    

Fair Value

    

Net Value

    

Fair Value

Term Loan

$

$

$

112,132

$

109,727

11.75% Notes

 

 

272,081

 

278,765

10.75% Notes

341,350

308,543

TVPX Loan

8,737

9,004

9,010

9,395

Total

$

350,087

$

317,547

$

393,223

$

397,887

The fair values of the TVPX Loan and the Term Loan were measured using a discounted cash flows model and current market rates. The fair values of the 10.75% Notes and the 11.75% Notes were measured using quoted prices, although the market is inactive. The fair value of debt was classified as Level 2 within the valuation hierarchy.