Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE MEASUREMENTS

v3.23.3
FAIR VALUE MEASUREMENTS
9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
FAIR VALUE MEASUREMENTS

NOTE 3 FAIR VALUE MEASUREMENTS

Derivative Financial Instruments

Derivative financial instruments are reported in the Condensed Consolidated Balance Sheets using fair value. See Note 4 – Derivative Financial Instruments for additional information on derivative financial instruments. The following table presents the fair value of the Company’s derivative financial instruments (in thousands):

September 30, 

    

December 31, 

2023

2022

Assets:

 

  

 

  

Derivative instruments - current

$

1,294

$

4,954

Derivative instruments - long-term

 

14,372

 

23,236

Liabilities:

 

  

 

  

Derivative instruments - current

 

17,659

 

46,595

Derivative instruments - long-term

 

11,790

 

43,061

The Company measures the fair value of derivative financial instruments 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.

Debt Instruments

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

    

September 30, 2023

    

December 31, 2022

Net Value

    

Fair Value

    

Net Value

    

Fair Value

TVPX Loan

$

9,620

$

9,783

$

$

Term Loan

118,234

113,478

143,307

139,056

11.75% Notes

269,305

 

283,580

 

 

9.75% Notes

 

 

 

550,130

 

544,902

Total

$

397,159

$

406,841

$

693,437

$

683,958

The fair value of the TVPX Loan and the Term Loan were measured using a discounted cash flows model and current market rates. The fair value of the 11.75% Notes and 9.75% Notes were measured using quoted prices, although the market is not a highly liquid market. The fair value of debt was classified as Level 2 within the valuation hierarchy.