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FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
U.S. GAAP defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date, and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The three-level hierarchy of valuation techniques established to measure fair value is defined as follows:
(i)Level 1 - Observable Inputs:  Quoted prices in active markets for identical investments;
(ii)Level 2 - Pricing Models with Significant Observable Inputs:  Other significant observable inputs, including quoted prices for similar investments, interest rates, credit risk, etc.; and
(iii)Level 3 - Unobservable Inputs:  Unobservable inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Management estimates include certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs, including the entity’s own assumptions in determining the fair value of derivatives and certain investments.
Whenever possible, the Company is required to use observable market inputs (Level 1) when measuring fair value. In such cases, the level at which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The assessment of the significance of a particular input requires judgment and considers factors specific to the asset or liability being measured. In certain cases, inputs used to measure fair value may fall into different levels of the fair value hierarchy.
The Company held the following types of financial instruments at fair value on a recurring basis as of June 30, 2025 and December 31, 2024:
Equity Securities. Equity securities includes investments in public company common stock and are recorded at fair value based on the quoted market price of each share on the valuation date. The fair value of these securities are within Level 1 of the valuation hierarchy. Equity investments that do not have regular market pricing, but for which fair value can be determined based on other data values or market prices, are recorded at fair value within Level 2 of the valuation hierarchy.
Commodity Derivative Instruments: Commodity derivative instruments are recorded at fair value using industry standard models using assumptions and inputs which are substantially observable in active markets throughout the full term of the instruments. These include market price curves, quoted market prices in active markets, credit risk adjustments, implied market volatility and discount factors. The fair value of these instruments are within Level 2 of the valuation hierarchy. During 2024, Benchmark executed derivative contracts with counterparties and also executed an International Swap Dealers Association Master Agreement (“ISDA”) with its counterparties. The net aggregate fair value of the open commodity derivatives assets was $2.9 million and $2.1 million as of June 30, 2025 and December 31, 2024, respectively and was recorded in prepaid expenses and other current assets and other non-current assets, in the consolidated balance sheet (refer to Note 2 to the consolidated financial statements included in our 2024 Annual Report).
Financial assets and liabilities measured at fair value on a recurring basis were as follows:
Level 1Level 2Level 3Total
(In thousands)
Assets
June 30, 2025:
Equity securities$21,467 $— $— $21,467 
Commodity derivative instruments$— $2,902 $— $2,902 
December 31, 2024:
Equity securities$23,135 $— $— $23,135 
Commodity derivative instruments$— $2,114 $— $2,114 
Information about financial instruments that are eligible for offset in the consolidated balance sheets were as follows:
June 30, 2025December 31, 2024
(In thousands)
Commodity derivative assets
Gross amount of recognized assets$4,933 $3,220 
Gross amount offset on the balance sheet(2,031)(1,106)
Net amount of assets on the balance sheet$2,902 $2,114 
Commodity derivative liabilities
Gross amount of recognized liabilities$2,031 $1,106 
Gross amount offset on the balance sheet(2,031)(1,106)
Net amount of liabilities on the balance sheet$— $— 
Benchmark’s realized derivative gain was $869,000 and $826,000 for the three and six months ended June 30, 2025, respectively. Benchmark’s realized derivative gain was $113,000 and $913,000 for the three and six months ended June 30, 2024, respectively. Benchmark’s unrealized derivative gain for the three and six months ended June 30, 2025 was $5.8 million and $789,000, respectively, and an unrealized derivative loss of $2.8 million and $3.4 million for the three and six months ended June 30, 2024, respectively.
In accordance with U.S. GAAP, from time to time, the Company measures certain assets and liabilities at fair value on a nonrecurring basis. Assets and liabilities accounted for on a non-recurring basis include asset retirement obligations incurred by the drilling of new oil and natural gas wells, the change in estimated asset retirement obligations, and the carrying value of proved and unproved oil and natural gas properties following impairment. The fair value of the asset retirement obligations is measured using valuation techniques consistent with the income approach, which converts future cash flows to a single discounted amount and significant inputs include the estimated plug and abandonment cost per well, the estimated life per well and the credit-adjusted risk-free rate. The fair value of the asset retirement obligations are within Level 3 of the fair value hierarchy. In connection with our Revolution Transaction, the fair value of the oil and gas properties was determined based upon estimated future discounted cash flow, a Level 3 input, using estimated production which we reasonably expect, and estimated prices adjusted for differentials. Unobservable inputs include estimated future oil and natural gas production, prices, operating and development costs and a discount rate of 12%, all Level 3 inputs
within the fair value hierarchy. The Company also reviews the carrying value of equity securities without readily determinable fair value, equity method investments and patents on a quarterly basis for indications of impairment, and other long-lived assets at least annually. When indications of potential impairment are identified, the Company may be required to determine the fair value of those assets and record an adjustment for the carrying amount in excess of the fair value determined. Any fair value determination would be based on valuation approaches, which are appropriate under the circumstances and utilize Level 2 and Level 3 measurements as required. In connection with our Deflecto acquisition, nonrecurring Level 3 valuations were performed for certain intangible assets, refer to Note 3 for additional information.