COMMODITY DERIVATIVE INSTRUMENTS

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The Company utilizes derivative instruments to manage its exposure to fluctuations in the underlying commodity prices of its inventory. The Company's management sets and implements hedging policies, including volumes, types of instruments and counterparties, to support oil prices at targeted levels and manage its exposure to fluctuating prices.

The Company’s derivative instruments consist of option and futures arrangements for oil. For option and futures arrangements, the Company receives the difference positive or negative between an agreed-upon strike price and the market price.

The mark-to-market effects of these contracts as of December 31, 2022 and December 31, 2021 are summarized in the following table. The notional amount is equal to the total net volumetric derivative position during the period indicated. The fair value of the crude oil options and future agreements is based on the difference between the strike price and the New York Mercantile Exchange and Brent Complex futures price for the applicable trading months.


December 31, 2022
Contract Type	Contract Period	Weighted Average Trade Price (Barrels)		Remaining Volume (Barrels)	Fair Value
				(in thousands)	(in thousands)
Swap	Nov. 2022 - Feb. 2023	$	4.19	5	(42)
Swap	Nov. 2022 - Feb. 2023	$	5.51	3	(27)
Future	Sept. 2022 - Dec. 2022	$	32.14	25	76
Future	Sept. 2022 - Dec. 2022	$	23.57	35	(92)
Future	Nov. 2022 - Feb. 2023	$	33.71	10	(23)
Futures	Sept. 2022 - Dec. 2022	$	23.75	10	30
Futures	Dec. 2022 - Mar. 2023	$	36.08	35	(74)
Futures	Dec. 2022 - Apr. 2023	$	35.97	1,000	(1,100)
Futures	Dec. 2022 - May. 2023	$	35.81	1,000	(1,070)
Futures	Dec. 2022 - Jun. 2023	$	35.60	1,000	2,080


December 31, 2021
Contract Type	Contract Period	Weighted Average Trade Price (Barrels)		Remaining Volume (Barrels)	Fair Value
				(in thousands)	(in thousands)
Options	Dec. 2021-Mar. 2022	$	3.18	18	$	136
Futures	Dec. 2021-Mar. 2022	$	31.59	20	$	71
Futures	Dec. 2021-Mar. 2022	$	32.48	50	$	(111)

The carrying values of the Company's derivatives positions and their locations on the consolidated balance sheets as of December 31, 2022 and 2021 are presented in the table below (in thousands):


Balance Sheet Classification	Contract Type	2022		2021

	Crude oil future	$	2,186	$	—
	Crude oil options	$	—	$	136
	Crude oil swaps	$	(69)	$	—
	Crude oil futures	$	(2,359)	$	(40)
Derivative commodity asset (liability)		$	(242)	$	96

For the years ended December 31, 2022, 2021 and 2020, we recognized an $87,978 thousand loss, $2,258 thousand loss and $3,477 thousand gain, respectively, on commodity derivative contracts on the consolidated statements of operations as part of our costs of revenues.