Quarterly report [Sections 13 or 15(d)]

FINANCIAL INSTRUMENTS

v3.26.1
FINANCIAL INSTRUMENTS
 3 Months Ended
Mar. 31, 2026
FINANCIAL INSTRUMENTS  
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 March 31, 2026:

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Average

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Instrument

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Daily

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Total

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Weighted

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Weighted

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Weighted

Period

  ​ ​ ​

Type

  ​ ​ ​

Volumes

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Volumes

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Strike Price

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Floor Price

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Ceiling Price

Oil (WTI)

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(Bbls) (1)

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(Bbls)

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($/Bbls)

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($/Bbls)

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($/Bbls)

Apr 2026 - Dec 2026

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collars

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4,000

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1,100,000

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$

—

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$

56.18

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$

69.40

Apr 2026 - Dec 2026

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swaps

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2,000

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550,000

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64.53

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—

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—

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(1)

Bbls – barrels of oil

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

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March 31, 

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December 31, 

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2026

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2025

Prepaid expenses and other current assets

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$

1,310

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$

318

Accrued liabilities

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25,823

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—

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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):

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Three Months Ended March 31, 

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2026

  ​ ​ ​

2025

  ​ ​ ​

Realized loss

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$

2,678

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$

3,639

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Unrealized loss (gain)

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21,835

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(882)

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Derivative loss, net

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$

24,513

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$

2,757

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Debt

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

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March 31, 2026

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December 31, 2025

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Net Value

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Fair Value

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Net Value

  ​ ​ ​

Fair Value

10.75% Notes

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$

342,879

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$

357,833

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$

342,355

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$

320,208

TVPX Loan

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8,309

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8,411

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8,458

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8,613

Total

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$

351,188

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$

366,244

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$

350,813

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$

328,821

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The fair value of the TVPX Loan was measured using a discounted cash flows model and current market rates. The fair value of the 10.75% Senior Second Lien Notes due 2029 (the “10.75% Notes”) was 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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