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Acquisitions of Oil and Natural Gas Properties
 9 Months Ended
Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Acquisitions of Oil and Natural Gas Properties Acquisitions of Oil and Natural Gas Properties
2023 New Mexico Acquisition
On April 3, 2023, the Company completed an acquisition of oil and natural gas properties (the "2023 New Mexico Acquisition") from Pecos Oil & Gas, LLC for $324.7 million, funded through a combination of proceeds from the issuance of $200 million of Senior Notes and borrowings under the Company's Credit Facility. The assets acquired are located in Eddy County, New Mexico, and include approximately 10,600 total contiguous net acres of leasehold. The acquisition also included 18 net horizontal wells and 250 net vertical wells.
The 2023 New Mexico Acquisition qualified as a business combination using the acquisition method of accounting. The following table presents the allocation of the total purchase price of the 2023 New Mexico Acquisition to the identified assets acquired and liabilities assumed based on estimated fair value as of the Closing Date.    
Purchase price allocation (in thousands):
Total cash consideration$324,686 
Assets acquired:
Inventory$2,980 
Oil and natural gas properties342,308 
Other
$149 
Amount attributable to assets acquired$345,437 
Liabilities assumed:
Revenue payable$1,475 
Asset retirement obligations19,276 
Amount attributable to liabilities assumed$20,751 
Net assets acquired$324,686 
Transaction costs associated with the 2023 New Mexico Acquisition were approximately $0.2 million and $5.8 million for the three and nine months ended September 30, 2023, respectively, and are included on the accompanying condensed consolidated statements of operations.
Pro Forma Operating Results
The following unaudited pro forma combined results for the three and nine months ended September 30, 2023, reflect the consolidated results of operations of the Company as if the 2023 New Mexico Acquisition had occurred on January 1, 2022. The unaudited pro forma information includes adjustments for (i) amortization for the discount and deferred financing costs and interest expense related to the Senior Notes and Credit Facility, (ii) depletion, depreciation and amortization expense, and (iii) interest expense related to the financing for the 2023 New Mexico Acquisition. In addition, the pro forma information has been effected for income taxes with a 23% statutory tax rate for the three and nine months ended September 30, 2023.
Three Months EndedNine Months Ended
September 30, 2023September 30, 2023
(In thousands, except per share amounts)
Total revenues$108,294 $305,813 
Net income$10,745 $87,545 
Basic net income per common share$0.55 $4.45 
Diluted net income per common share$0.54 $4.39 
The unaudited pro forma combined financial information is for informational purposes only and is not intended to represent or to be indicative of the combined results of operations that the Company would have reported had the 2023 New Mexico Acquisition been completed as of January 1, 2022, and should not be taken as indicative of the Company's future combined results of operations. The actual results may differ significantly from that reflected in the unaudited pro forma combined financial information for a number of reasons, including, but not limited to, differences in assumptions used to prepare the unaudited pro forma combined financial information and actual results.
2024 New Mexico Asset Acquisition
On May 7, 2024, the Company closed on the acquisition of oil and natural gas properties in Eddy County, New Mexico ("2024 New Mexico Asset Acquisition"), which included 13,900 contiguous net acres to the Company's existing acreage in Eddy County, for a cash purchase price of approximately $19.1 million plus $0.5 million in transaction costs. The 2024 New Mexico Asset Acquisition was accounted for as an asset acquisition, with the final purchase price and transaction costs being capitalized to oil and natural gas properties. This acquisition was funded through a combination of proceeds from the 2024 equity issuance ("2024 Equity Offering") discussed in Note 11 - Shareholders' Equity and cash on hand.