ADDITIONAL FINANCIAL STATEMENT INFORMATION

3 Months Ended

Mar. 31, 2024

ADDITIONAL FINANCIAL STATEMENT INFORMATION

ADDITIONAL FINANCIAL STATEMENT INFORMATION

11. ADDITIONAL FINANCIAL STATEMENT INFORMATION

Certain balance sheet amounts are comprised of the following (in thousands):

	March 31, 2024		December 31, 2023
Accounts receivable, net:
Oil, natural gas and natural gas liquids revenues	$	22,298	$	19,802
Joint interest accounts		2,108		2,138
Other		1,581		1,081
	$	25,987	$	23,021
Prepaids and other:
Prepaids	$	532	$	490
Funds in escrow		346		345
Other		41		72
	$	919	$	907
Other assets (Non-current):
Investment in unconsolidated affiliate	$	1,007	$	1,283
Contract asset		18,454		15,062
Funds in escrow		558		552
Other		761		759
	$	20,780	$	17,656
Accounts payable and accrued liabilities:
Trade payables	$	21,689	$	24,915
Accrued oil and natural gas capital costs		11,730		15,337
Revenues and royalties payable		21,491		18,986
Accrued employee compensation		509		520
Accrued lease operating expenses		7,360		6,418
Other		338		349
	$	63,117	$	66,525

Investment in Unconsolidated Affiliate. In May 2022, the Company entered into a joint venture with Caracara to develop an acid gas treatment facility to remove hydrogen sulfide and carbon dioxide from its produced natural gas. Caracara provided the initial capital for the construction of the treatment facility. The Company contributed certain full cost pool assets to the related party joint venture in a non-cash exchange for a retained 5% equity interest in WAT (previously Brazos Amine Treater, LLC (“BAT”)), an unconsolidated subsidiary. For accounting purposes, since the Company does not control the key activities (e.g. operating and maintaining the facility) which most significantly impact economic performance nor does the Company have the obligation to absorb losses or the right to receive benefits that could potentially be significant, the Company is not the primary beneficiary of WAT. Accordingly, the Company accounts for its investment in WAT (a related party) using the equity method of accounting based on its ability to exercise significant influence, but not control, over the key activities of the joint venture. For more information related to this joint venture, see Note 8, “Commitments and Contingencies”.

Contract Asset. The Company advanced $3.4 million during the first quarter of 2024 resulting in a total of $18.5 million in contributions on behalf of its joint venture partner in WAT to fund a workover operation on the Acid Gas Injection (“AGI”) well. Pursuant to the terms of the agreement governing the joint venture, the Company has multiple remedies to recover such advance, including (1) declaring such payment a loan, which pursuant to the agreement would have an interest rate of the lessor of 15% or the maximum rate permitted by law, (2) recoupment from distributions from the joint venture and (3) reallocation of equity of the joint venture based on the relative level of total capital contributions by the parties after taking into account the advance.