Commitments and Contingencies

3 Months Ended

Mar. 31, 2026

Commitments and Contingencies [Abstract]

Note 11 – Commitments and Contingencies

Following the closing of the Bayswater Acquisition in March 2025, the Company is party to agreements containing minimum volume commitments, which require the Company to deliver fixed determinable quantities of crude oil, natural gas, and NGL production volumes.

Oil Transportation Agreement

The Company is party to a Crude Oil Purchase and Sale Agreement (the “Oil Transportation Agreement”) with an oil pipeline company, under which all of the oil produced from certain of the leases purchased in the Bayswater Acquisition will be gathered and transported by the oil pipeline company. Additionally, the Oil Transportation Agreement, as amended in 2023, requires a minimum volume of 15.85 million barrels of oil from the covered leases to be delivered from September 1, 2022 through December 31, 2026. As of March 31, 2026, 1.5 million barrels of oil remained to be delivered and under–delivered volumes will incur a fee ranging from $1.64 per Bbl to $1.81 per Bbl. During the three months ended March 31, 2026, the Company incurred under–delivered volume fees totaling $0.7 million, which is included in transportation and processing expenses on the condensed consolidated statements of operations. The Company did not incur any fees during the three months ended March 31, 2025, as this was prior to the Bayswater Acquisition. As of March 31, 2026, the Company estimates its maximum future commitment under the Oil Transportation Agreement to be $0.8 million for April 1, 2026 through December 31, 2026. The Company will recognize these costs in the period in which the amounts are deemed probable and estimable.

Gas Gathering Agreement

One of the Company’s gas gathering and processing agreements acquired in the Bayswater Acquisition requires a monthly minimum payment, which began in October 2019 and continues through September 2029. This monthly minimum payment is intended to reimburse the costs incurred by the counterparty to connect the gathering facility to the covered area. During the three months ended March 31, 2026, the Company recognized guaranteed payments of $0.3 million, which is included in lease operating expenses on the condensed consolidated statements of operations. The Company did not incur any fees during the three months ended March 31, 2025, as this was prior to the Bayswater Acquisition.

The Company’s estimated maximum future commitment under the Company’s gas gathering and processing agreements as of March 31, 2026 is presented below:

	(In thousands)
April 1, 2026 through December 31, 2026	$	1,277
January 1, 2027 through December 31, 2027		1,703
January 1, 2028 through December 31, 2028		1,703
January 1, 2029 through September 31, 2029		1,277
Maximum Guaranteed Payments	$	5,960

Legal and Litigation

The Company is subject to various litigation, claims and proceedings, which arise in the ordinary course of business. The Company recognizes a liability for such loss contingencies when it believes it is probable that a liability has been incurred, and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount the Company accrues the minimum amount in the range. The outcomes of any such currently pending matters are not expected to have a material adverse effect on the Company’s financial position or results of operations. During the three months ended March 31, 2026, the Company incurred $3.3 million of non–recurring litigation expenses, which are reflected as general and administrative expenses on its condensed consolidated statement of operations. The Company did not recognize any non–recurring litigation expenses during the three months ended March 31, 2025.