Derivative Financial Instruments

12 Months Ended

Dec. 31, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 12 — DERIVATIVE FINANCIAL INSTRUMENTS

From time to time, the Company uses derivative financial instruments to mitigate its exposure to commodity price risk associated with oil, natural gas and NGL prices. The Company records derivative financial instruments on its consolidated balance sheets as either assets or liabilities measured at fair value. The Company has elected not to apply hedge accounting for its existing derivative financial instruments. As a result, the Company recognizes the change in derivative fair value between reporting periods currently in its consolidated statements of income as an unrealized gain or loss. The fair value of the Company’s derivative financial instruments is determined using industry-standard models that consider various inputs including: (i) quoted forward prices for commodities, (ii) time value of money and (iii) current market and contractual prices for the underlying instruments, as well as other relevant economic measures. The Company has evaluated and considered the credit standings of its counterparties in determining the fair value of its derivative financial instruments.

At December 31, 2025, the Company had various costless collar contracts open and in place to mitigate its exposure to oil price volatility, each with an established price floor and ceiling. At December 31, 2025, the Company had natural gas basis

differential swap contracts open and in place to mitigate its exposure to natural gas price volatility, with a specific term (calculation period), notional quantity (volume hedged) and fixed price. The Company had no open contracts associated with NGL prices at December 31, 2025.

The following is a summary of the Company’s open costless collar contracts at December 31, 2025.

Commodity	Calculation Period	Notional Quantity (Bbl or MMBtu)	Weighted Average Price Floor ($/Bbl or $/MMBtu)		Weighted Average Price Ceiling ($/Bbl or $/MMBtu)		Fair Value of Asset (Liability) (thousands)
Oil	01/01/2026 - 12/31/2026	6,752,500	$	50.00	$	65.00	$	717
Natural Gas	01/01/2026 - 12/31/2026	54,750,000	$	3.50	$	6.70	17,396
Total open costless collar contracts							$	18,113

The following is a summary of the Company’s open basis differential swap contracts at December 31, 2025.

		Notional Quantity (MMBtu)	Fixed Price ($/MMBtu)		Fair Value of Asset (Liability) (thousands)
Commodity	Calculation Period
Natural Gas Basis Differential	01/01/2026 - 12/31/2026	54,750,000	$	(2.52)	$	15,939
Total open basis differential swap contracts					$	15,939

The Company’s derivative financial instruments are subject to master netting arrangements, and the Company’s counterparties allow for cross-commodity master netting provided the settlement dates for the commodities are the same. The Company does not present different types of commodities with the same counterparty on a net basis in its consolidated balance sheets.

The following table presents the gross asset and liability fair values of the Company’s commodity price derivative financial instruments and the location of these balances in the consolidated balance sheets as of December 31, 2025 and December 31, 2024 (in thousands).

Derivative Instruments	Gross amounts recognized		Gross amounts netted in the consolidated balance sheets		Net amounts presented in the consolidated balance sheets
December 31, 2025
Current assets	$	57,450	$	(23,398)	$	34,052
Current liabilities	(23,398)		23,398		—
Total	$	34,052	$	—	$	34,052
December 31, 2024
Current assets	$	19,899	$	(3,931)	$	15,968
Current liabilities	(3,931)		3,931		—
Total	$	15,968	$	—	$	15,968

The following table summarizes the location and aggregate gain (loss) of all derivative financial instruments recorded in the consolidated statements of income for the periods presented (in thousands).

		Year Ended December 31,
Type of Instrument	Location in Statements of Income	2025		2024		2023
Derivative Instrument
Natural Gas	Revenues: Realized gain (loss) on derivatives	$	21,679	$	12,724	$	(9,575)
Realized gain (loss) on derivatives		21,679		12,724		(9,575)
Oil	Revenues: Unrealized (loss) gain on derivatives	(2,958)		3,676		—
Natural Gas	Revenues: Unrealized gain (loss) on derivatives	21,042		9,623		(1,261)
Unrealized gain (loss) on derivatives		18,084		13,299		(1,261)
Total		$	39,763	$	26,023	$	(10,836)