Note 17 - Supplemental Crude Oil and Natural Gas Disclosures (Unaudited)

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Oil and Gas, Supplemental Disclosure [Text Block]

NOTE 17 – Supplemental Crude Oil and Natural Gas Disclosures (Unaudited)

The Company only has one reportable operating segment, which is crude oil and natural gas development, exploration and production in the U.S.

Net Capitalized Costs

The following table reflects the capitalized costs of crude oil and natural gas properties and the related accumulated depletion (in thousands):

	December 31,
	2024			2023
Proved properties	$	3,959,545		$	3,338,107
Unproved properties		70,868			72,715
Total capitalized costs		4,030,413			3,410,822
Less: accumulated depletion		(1,184,684	)		(684,179	)
Net capitalized costs	$	2,845,729		$	2,726,643

Cost Incurred in Crude Oil and Natural Gas Property Acquisition, Exploration and Development

The following table reflects costs incurred in crude oil and natural gas property acquisition, development and exploratory activities (in thousands):

	Year Ended December 31,
	2024		2023		2022
Acquisition costs:
Proved properties	$	385	$	3,308	$	352,791
Unproved properties		14,459		11,777		174,554
Total acquisition costs		14,844		15,085		527,345
Exploration costs		162,223		527,502		655,433
Development costs		442,076		481,528		391,298
Crude oil and natural gas expenditures		619,143		1,024,115		1,574,076
Asset retirement obligations, net		1,068		6,048		2,879
Total costs incurred	$	620,211	$	1,030,163	$	1,576,955

Results of Operations for Crude Oil, NGL and Natural Gas Producing Activities

The following table reflects the Company’s results of operations for crude oil, NGL and natural gas producing activities (in thousands):

	Year Ended December 31,
	2024		2023		2022
Crude oil, NGL and natural gas sales	$	1,069,414	$	1,111,293	$	755,686
Lease operating expenses		132,244		145,362		69,599
Production and ad valorem taxes		59,677		58,472		38,440
Exploration and abandonment expense		1,476		5,234		1,149
Depletion, depreciation and amortization expense		500,752		424,424		177,742
Accretion of discount on asset retirement obligations		966		522		370
Income tax expense		78,603		100,229		98,361
Results of operations from crude oil and natural gas production activities	$	295,696	$	377,050	$	370,025

Crude Oil, NGL and Natural Gas Reserves

Proved reserves were estimated in accordance with guidelines established by the SEC, which require that reserve estimates be prepared under existing economic and operating conditions based upon the 12-month unweighted average of the first day of the month spot prices prior to the end of the reporting period. These prices as of December 31, 2024, 2023 and 2022 were $75.48, $78.22 and $93.67 per barrel for crude oil and NGL and $2.130, $2.637 and $6.358 per MMBtu for natural gas, respectively. The estimated realized prices used in computing the Company’s reserves as of December 31, 2024 were as follows: (i) $75.56 per barrel of crude oil, (ii) $20.53 per barrel of NGL, and (iii) $0.072 per Mcf of natural gas. The estimated realized prices used in computing the Company’s reserves as of December 31, 2023 were as follows: (i) $78.13 per barrel of crude oil, (ii) $17.33 per barrel of NGL, and (iii) $0.198 per Mcf of natural gas. The estimated realized prices used in computing the Company’s reserves as of December 31, 2022 were as follows: (i) $94.59 per barrel of crude oil, (ii) $36.69 per barrel of NGL, and (iii) $4.871 per Mcf of natural gas. All prices are net of adjustments for regional basis differentials, treating costs, transportation, gas shrinkage, gas heating value (BTU content) and/or crude quality and gravity adjustments.

The proved reserve estimates as of December 31, 2024, 2023 and 2022 were prepared by Cawley, Gillespie & Associates, Inc. (“CG&A”), independent reserve engineers, and reflect the Company’s current development plans. All estimates of proved reserves are determined according to the rules prescribed by the SEC in existence at the time estimates were made. These rules require that the standard of “reasonable certainty” be applied to proved reserve estimates, which is defined as having a high degree of confidence that the quantities will be recovered. A high degree of confidence exists if the quantity is much more likely to be achieved than not, and, as more technical and economic data becomes available, a positive or upward revision or no revision is much more likely than a negative or downward revision. Estimates are subject to revision based upon a number of factors, including many factors beyond the Company’s control, such as reservoir performance, prices, economic conditions, and government restrictions. In addition, results of drilling, testing, and production subsequent to the date of an estimate may justify revision of that estimate.

Reserve estimates are often different from the quantities of crude oil and natural gas that are ultimately recovered. Estimating quantities of proved crude oil and natural gas reserves is a complex process that involves significant interpretations and assumptions and cannot be measured in an exact manner. It requires interpretations and judgment of available technical data, including the evaluation of available geological, geophysical and engineering data. The accuracy of any reserve estimate is highly dependent on the quality of available data, the accuracy of the assumptions on which they are based upon, economic factors, such as crude oil and natural gas prices, production costs, severance and excise taxes, capital expenditures, workover and remedial costs, and the assumed effects of governmental regulation. In addition, due to the lack of substantial, if any, production data, there are greater uncertainties in estimating PUD reserves, proved developed non-producing reserves and proved developed reserves that are early in their production life. As a result, the Company’s reserve estimates are inherently imprecise.

The meaningfulness of reserve estimates is highly dependent on the accuracy of the assumptions on which they were based. In general, the volume of production from crude oil and natural gas properties the Company owns declines as reserves are depleted. Except to the extent the Company conducts successful exploration and development activities or acquires additional properties containing proved reserves, or both, the Company’s proved reserves will decline as reserves are produced.

The following table reflects changes in proved reserves during the periods indicated:

	Crude Oil (MBbl)			NGL (MBbl)			Natural Gas (MMcf)			Total (MBoe)
Proved Reserves on December 31, 2021		51,825			7,378			30,061			64,213
Extensions and discoveries		47,677			6,162			24,887			57,987
Purchase of reserves-in-place		13,031			3,467			14,448			18,906
Revisions of previous estimates		(6,155	)		(1,817	)		(7,435	)		(9,211	)
Production		(7,562	)		(821	)		(3,323	)		(8,937	)
Proved Reserves on December 31, 2022		98,816			14,369			58,638			122,958
Extensions and discoveries		54,137			6,456			27,330			65,148
Purchase of reserves-in-place		89			47			208			171
Sales of reserves-in-place		(1,171	)		(127	)		(531	)		(1,387	)
Revisions of previous estimates		(18,432	)		898			8,644			(16,093	)
Production		(13,885	)		(1,547	)		(7,218	)		(16,635	)
Proved Reserves on December 31, 2023		119,554			20,096			87,071			154,162
Extensions and discoveries		34,971			5,387			28,476			45,104
Revisions of previous estimates		(5,378	)		10,919			74,854			18,017
Production		(13,876	)		(2,284	)		(12,747	)		(18,285	)
Proved Reserves on December 31, 2024		135,271			34,118			177,654			198,998

On December 31, 2024, the Company had approximately 198,998 MBoe of proved reserves. For the year ended December 31, 2024, extensions and discoveries increased proved reserves by 45,104 MBoe as a result of; (i) drilling 18 gross (14.6 net) exploratory/extension wells that were on production as of December 31, 2024, (ii) 5 gross (5.0 net) exploratory/extension wells that were in the final stages of completion as of December 31, 2024, and (iii) the addition of 79 gross (68.9 net) PUDs. Upward revisions of previous estimates of 18,017 MBoe for the year ended December 31, 2024 were the result of positive revisions of approximately 19,406 MBoe primarily due to technical revisions attributable to increased well performance and adjustments to our estimates, partially offset by approximately 804 MBoe primarily due to increased forecasted operating expenses and approximately 585 MBoe primarily related to decreases in crude oil, NGL and natural gas realized prices. The aforementioned net increase in proved reserves was partially offset by 18,285 MBoe in production during the year ended December 31, 2024. The Company’s current development plan reflects allocation of capital with a focus on efficiencies, recoveries and rates of return.

On December 31, 2023, the Company had approximately 154,162 MBoe of proved reserves. For the year ended December 31, 2023, extensions and discoveries increased proved reserves by 65,148 MBoe as a result of; (i) drilling 63 gross (56.4 net) exploratory/extension wells that were on production as of December 31, 2023, (ii) 7 gross (6.6 net) exploratory/extension wells that were in the final stages of completion as of December 31, 2023, and (iii) the addition of 117 gross (102.4 net) PUDs. The Company also acquired 171 MBoe of reserves as part of its acquisition activities and divested of 1,387 MBoe of reserves in a farm out to another operator in return for a carried interest during the year ended December 31, 2023. Downward revisions of previous estimates of 16,093 MBoe for the year ended December 31, 2023 were the result of negative revisions of approximately 13,729 MBoe primarily due to technical revisions attributable to decreased well performance and adjustments to our estimates, approximately 1,775 MBoe primarily related to decreases in crude oil, NGL and natural gas realized prices and approximately 589 MBoe primarily due to increased forecasted operating expenses. The aforementioned net increase in proved reserves was partially offset by 16,635 MBoe in production during the year ended December 31, 2023. The Company’s current development plan reflects allocation of capital with a focus on efficiencies, recoveries and rates of return.

On December 31, 2022, the Company had approximately 122,958 MBoe of proved reserves. For the year ended December 31, 2022, extensions and discoveries increased proved reserves by 57,987 MBoe as a result of: (i) drilling 37 gross (32.1 net) exploratory/extension wells that were on production as of December 31, 2022, (ii) 16 gross (14.8 net) exploratory/extension wells that were in the final stages of completion as of December 31, 2022, and (iii) the addition of 80 gross (75.2 net) PUDs. The Company also acquired 18,906 MBoe of reserves as part of its acquisition activities during the year ended December 31, 2022. Downward revisions of previous estimates of 9,211 MBoe for the year ended December 31, 2022 were primarily the result of negative revisions of 10,418 MBoe due to technical revisions attributable to decreased well performance and adjustments to our PUD estimates, partially offset by positive revisions of approximately 1,116 MBoe related to increases in crude oil, NGL and natural gas realized prices and positive revisions of approximately 91 MBoe primarily due to decreased forecasted operating expenses. The aforementioned net increase in proved reserves was partially offset by 8,937 MBoe in production during the year ended December 31, 2022. The Company’s current development plan reflects allocation of capital with a focus on efficiencies, recoveries and rates of return.

The following table sets forth the Company’s estimated quantities of proved developed and proved undeveloped crude oil, NGL and natural gas reserves:

	December 31,
	2024		2023		2022
Proved Developed Reserves (1)
Crude oil (MBbl)		65,632		58,631		47,845
NGL (MBbl)		22,753		12,183		7,968
Natural gas (MMcf)		118,402		52,671		32,669
Total (MBoe)		108,119		79,593		61,258
Proved Undeveloped Reserves
Crude oil (MBbl)		69,639		60,923		50,971
NGL (MBbl)		11,365		7,913		6,401
Natural gas (MMcf)		59,252		34,400		25,969
Total (MBoe)		90,879		74,569		61,700
Total Proved Reserves
Crude oil (MBbl)		135,271		119,554		98,816
NGL (MBbl)		34,118		20,096		14,369
Natural gas (MMcf)		177,654		87,071		58,638
Total (MBoe)		198,998		154,162		122,958

(1) As of December 31, 2024, 2023 and 2022, proved developed reserves includes proved developed non-producing reserves of 6,239, 4,598 and 7,417 MBbl of crude oil, 1,044, 534 and 927 MBbl of NGL and 5,668, 1,889 and 3,641 MMcf of natural gas, respectively.

On December 31, 2024, the Company’s estimated PUD reserves were approximately 90,879 MBoe, a 16,310 MBoe increase over the reserve estimate at December 31, 2023 of 74,569 MBoe. The following table includes the changes in PUD reserves for 2024 (in MBoe):

Beginning proved undeveloped reserves on December 31, 2023	74,569
Undeveloped reserves transferred to proved developed reserves	(18,050	)
Extensions and discoveries	33,540
Sales of reserves-in-place	(0	)
Revisions	820
Ending proved undeveloped reserves on December 31, 2024	90,879

Standardized Measure of Discounted Future Net Cash Flows

The following table reflects the Company’s standardized measure of discounted future net cash flows relating from its proved crude oil, natural gas and NGL reserves (in thousands):

	December 31,
	2024			2023			2022
Future cash inflows	$	10,934,170		$	9,706,290		$	10,159,310
Future production costs		(3,240,114	)		(2,869,377	)		(2,289,852	)
Future development costs (1)		(1,547,179	)		(1,568,033	)		(983,732	)
Future income tax expense		(837,031	)		(680,894	)		(1,102,156	)
Future net cash flows		5,309,846			4,587,986			5,783,570
Discount to present value at 10% annual rate		(2,314,849	)		(1,980,282	)		(2,367,062	)
Standardized measure of discounted future net cash flows (1)	$	2,994,997		$	2,607,704		$	3,416,508

The following table reflects the principal changes in the standardized measure of discounted future net cash flows attributable to the Company’s proved reserves (in thousands):

	Year Ended December 31,
	2024			2023			2022
Standardized measure of discounted future net cash flows, beginning of year	$	2,607,704		$	3,416,508		$	1,118,809
Sales of crude oil and natural gas, net of production costs		(877,493	)		(907,459	)		(647,647	)
Extensions and discoveries, net of future development costs (1)		772,541			1,202,674			1,785,822
Net changes in prices and production costs		(547,790	)		(1,404,147	)		909,053
Changes in estimated future development costs (1)		110,664			(37,820	)		(23,647	)
Purchases of minerals-in-place		—			4,344			499,478
Sales of reserves-in-place		—			(25,069	)		—
Revisions of previous quantity estimates		361,064			(390,282	)		(354,868	)
Accretion of discount		288,117			395,656			134,338
Net changes in income taxes		(130,265	)		266,579			(315,478	)
Net changes in timing of production and other		410,455			86,720			310,648
Standardized measure of discounted future net cash flows, end of year (1)	$	2,994,997		$	2,607,704		$	3,416,508

(1) The standardized measure of discounted future net cash flows reflects, within the category for future development costs, all estimated future costs that will be incurred to settle our asset retirement obligations, including costs for dismantlement, restoration, and abandonment of the existing wells (including both active and inactive wells on leases and future proved undeveloped locations), in each case in compliance with FASB ASC 932-235-50-36.