NOTE 13 — INVESTMENT IN MONZA

Monza was formed and funded by the Company, third-party investors and an entity owned and controlled by the Company’s CEO with total commitments by all members, including the Company’s commitment to fund its retained interest in Monza projects held outside of Monza, of $361.4 million, which includes the Company’s contribution of 88.94% of its working interest in certain identified undeveloped drilling projects. The entity affiliated with the Company’s CEO invested as a minority investor on the same terms and conditions as the third-party investors.

Monza jointly participates with the Company in the exploration, drilling and development of certain drilling projects (the “Joint Venture Drilling Program”) in the Gulf of America. The Joint Venture Drilling Program is structured so that the Company initially receives an aggregate of 30.0% of the revenues less expenses, through both the Company’s direct ownership of its working interest in the projects and the Company’s indirect interest through its interest in Monza, for contributing 20.0% of the estimated total well costs plus associated leases and providing access to available infrastructure at agreed-upon rates. Any exceptions to this structure are approved by the Monza board of directors.

Monza is an entity separate from any other entity with its own separate creditors who will be entitled, upon its liquidation, to be satisfied out of Monza’s assets prior to any value in Monza becoming available to holders of its equity. The assets of Monza are not available to pay creditors of the Company and its affiliates.

As of December 31, 2025, nine wells have been completed since the inception of the Joint Venture Drilling Program, of which seven are producing. The Company is the operator for five of these wells completed.

As required, the Company may call on Monza to provide cash to fund its portion of certain Joint Venture Drilling Program projects in advance of capital expenditure spending. As of both December 31, 2025 and 2024, the unused advances were $2.4 million, which are included in Accounts payable in the Consolidated Balance Sheets.

Since inception through December 31, 2025, members of Monza have made partner capital contributions, including the Company’s contributions of working interest in the drilling projects, to Monza totaling $302.4 million and received cash distributions totaling $273.7 million. Since inception through December 31, 2025, the Company has made total capital contributions, including the contributions of working interest in the drilling projects, to Monza totaling $68.2 million and received cash distributions totaling $59.2 million.

Consolidation and Carrying Amounts

Monza is considered to be a variable interest entity. As the Company is not considered the primary beneficiary of Monza, the Company does not fully consolidate Monza but instead consolidates Monza based on its ownership interest. The Company reconsiders its evaluation of whether to consolidate Monza each reporting period based upon changes in the facts and circumstances pertaining to Monza. Monza is considered a variable interest entity that is proportionally consolidated. As of December 31, 2025, there have been no events or changes that would cause a redetermination of the variable interest status.

The following table presents the amounts recorded by the Company in the Consolidated Balance Sheets related to the consolidation of the proportional interest in Monza’s operations (in thousands):

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The following table presents the amounts recorded by the Company in the Consolidated Statement of Operations related to the consolidation of the proportional interest in Monza’s operations (in thousands):

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