FINANCIAL INSTRUMENTS |
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| 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 September 30, 2025:
The fair value of the Company’s derivative financial instruments was recorded in the Condensed Consolidated Balance Sheets as follows (in thousands):
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 was as follows (in thousands):
Debt The following table presents the net values and estimated fair values of the Company’s debt (in thousands):
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.
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