DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
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6 Months Ended |
Jun. 30, 2023 |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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| Schedule of Contracts on the Balance Sheet |
The following presents the impact of the Company’s contracts on its Condensed Balance Sheets for the periods indicated.
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As of |
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June 30, 2023 |
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December 31, 2022 |
| Commodity derivative instruments, marked to market: |
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| Derivative assets, current |
$ |
14,604,030 |
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$ |
16,193,327 |
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| Discounted deferred premiums |
(6,296,493) |
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(11,524,165) |
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| Derivatives assets, current, net of premiums |
$ |
8,307,537
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$ |
4,669,162
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| Derivative assets, noncurrent |
$ |
10,555,937 |
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$ |
7,606,258 |
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| Discounted deferred premiums |
— |
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(1,476,848) |
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| Derivative assets, noncurrent, net of premiums |
$ |
10,555,937
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$ |
6,129,410
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| Derivative liabilities, current |
$ |
7,848,580
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$ |
13,345,619
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| Derivative liabilities, noncurrent |
$ |
10,829,096
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$ |
10,485,650
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| Schedule of Components of Gain (Loss) on Derivative Contracts |
The components of “Gain (loss) on derivative contracts” from the Condensed Statements of Operations are as follows for the respective periods:
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For the Three Months Ended |
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For the Six Months Ended |
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June 30, 2023 |
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June 30, 2022 |
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June 30, 2023 |
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June 30, 2022 |
| Oil derivatives: |
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| Realized gain (loss) on oil derivatives |
$ |
(833,841) |
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$ |
(19,617,265) |
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$ |
(1,497,603) |
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$ |
(33,732,766) |
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| Unrealized gain (loss) on oil derivatives |
4,545,136 |
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12,160,247 |
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12,652,157 |
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(1,320,393) |
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| Gain (loss) on oil derivatives |
$ |
3,711,295 |
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$ |
(7,457,018) |
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$ |
11,154,554 |
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$ |
(35,053,159) |
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| Natural gas derivatives: |
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| Realized gain (loss) on natural gas derivatives |
1,013,436 |
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— |
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1,018,673 |
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— |
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| Unrealized gain (loss) on natural gas derivatives |
(1,460,071) |
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— |
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566,338 |
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— |
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| Gain (loss) on natural gas derivatives |
$ |
(446,635) |
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$ |
— |
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$ |
1,585,011 |
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$ |
— |
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| Gain (loss) on derivative contracts |
$ |
3,264,660 |
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$ |
(7,457,018) |
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$ |
12,739,565 |
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$ |
(35,053,159) |
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| Schedule of Components of Cash (Paid) Received for Commodity Derivative Settlements |
The components of “Cash paid for derivative settlements, net” within the Condensed Statements of Cash Flows are as follows for the respective periods:
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For the Three Months Ended |
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For the Six Months Ended |
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June 30, 2023 |
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June 30, 2022 |
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June 30, 2023 |
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June 30, 2022 |
| Cash flows from operating activities |
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| Cash received (paid) for oil derivatives |
$ |
(833,841) |
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$ |
(19,617,265) |
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$ |
(1,497,603) |
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$ |
(33,732,766) |
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| Cash received (paid) from natural gas derivatives |
1,013,436 |
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— |
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1,018,673 |
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— |
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| Cash received (paid) for derivative settlements, net |
$ |
179,595 |
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$ |
(19,617,265) |
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$ |
(478,930) |
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$ |
(33,732,766) |
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| Derivatives Not Designated as Hedging Instruments |
The following tables reflect the details of current derivative contracts as of June 30, 2023 (Quantities are in barrels (Bbl) for the oil derivative contracts and in million British thermal units (MMBtu) for the natural gas derivative contracts):
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Oil Hedges (WTI) |
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Q3 2023 |
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Q4 2023 |
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Q1 2024 |
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Q2 2024 |
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Q3 2024 |
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Q4 2024 |
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Q1 2025 |
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Q2 2025 |
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Q3 2025 |
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Q4 2025 |
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| Swaps: |
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| Hedged volume (Bbl) |
181,700 |
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138,000 |
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170,625 |
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156,975 |
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282,900 |
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368,000 |
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— |
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— |
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— |
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— |
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| Weighted average swap price |
$ |
74.19 |
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$ |
74.52 |
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$ |
67.40 |
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$ |
66.40 |
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$ |
65.49 |
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$ |
68.43 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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| Deferred premium puts: |
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| Hedged volume (Bbl) |
230,000 |
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165,600 |
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45,500 |
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45,500 |
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— |
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— |
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— |
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— |
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— |
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— |
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| Weighted average strike price |
$ |
80.47 |
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$ |
83.78 |
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$ |
84.70 |
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$ |
82.80 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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| Weighted average deferred premium price |
$ |
10.60 |
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$ |
14.61 |
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$ |
17.15 |
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$ |
17.49 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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| Two-way collars: |
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| Hedged volume (Bbl) |
211,163 |
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274,285 |
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339,603 |
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325,847 |
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230,000 |
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128,800 |
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474,750 |
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464,100 |
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— |
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— |
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| Weighted average put price |
$ |
55.56 |
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$ |
56.73 |
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$ |
64.20 |
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$ |
64.30 |
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$ |
64.00 |
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$ |
60.00 |
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$ |
57.06 |
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$ |
60.00 |
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$ |
— |
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$ |
— |
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| Weighted average call price |
$ |
69.25 |
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$ |
70.77 |
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$ |
79.73 |
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$ |
79.09 |
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$ |
76.50 |
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$ |
73.24 |
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$ |
75.82 |
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$ |
69.85 |
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$ |
— |
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$ |
— |
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| Three-way collars: |
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| Hedged volume (Bbl) |
16,242 |
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15,598 |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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| Weighted average first put price |
$ |
45.00 |
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$ |
45.00 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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| Weighted average second put price |
$ |
55.00 |
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$ |
55.00 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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| Weighted average call price |
$ |
80.05 |
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$ |
80.05 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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Gas Hedges (Henry Hub) |
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Q3 2023 |
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Q4 2023 |
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Q1 2024 |
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Q2 2024 |
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Q3 2024 |
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Q4 2024 |
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Q1 2025 |
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Q2 2025 |
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Q3 2025 |
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Q4 2025 |
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| NYMEX Swaps: |
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| Hedged volume (MMBtu) |
144,781 |
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203,706 |
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152,113 |
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138,053 |
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121,587 |
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644,946 |
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616,199 |
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|
591,725 |
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— |
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— |
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| Weighted average swap price |
$ |
3.36 |
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$ |
3.35 |
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$ |
3.62 |
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$ |
3.61 |
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$ |
3.59 |
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$ |
4.45 |
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$ |
3.78 |
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$ |
3.43 |
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$ |
— |
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$ |
— |
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| Two-way collars: |
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| Hedged volume (MMBtu) |
404,421 |
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|
579,998 |
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591,500 |
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568,750 |
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|
552,000 |
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— |
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— |
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— |
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— |
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— |
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| Weighted average put price |
$ |
3.17 |
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$ |
3.15 |
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$ |
4.00 |
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$ |
4.00 |
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$ |
4.00 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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| Call hedged volume (MMBtu) |
404,421 |
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|
579,998 |
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|
591,500 |
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|
568,750 |
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|
552,000 |
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— |
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— |
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— |
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— |
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— |
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| Weighted average call price |
$ |
4.55 |
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$ |
4.50 |
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$ |
6.29 |
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$ |
6.29 |
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$ |
6.29 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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Oil Hedges (basis differential) |
|
Q3 2023 |
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Q4 2023 |
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Q1 2024 |
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Q2 2024 |
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Q3 2024 |
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Q4 2024 |
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Q1 2025 |
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Q2 2025 |
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Q3 2025 |
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Q4 2025 |
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| Argus basis swaps: |
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| Hedged volume (MMBtu) |
305,000 |
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|
460,000 |
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|
364,000 |
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364,000 |
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|
368,000 |
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368,000 |
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270,000 |
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273,000 |
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|
276,000 |
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|
276,000 |
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Weighted average spread price (1)
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$ |
1.10 |
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$ |
1.10 |
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$ |
1.15 |
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$ |
1.15 |
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$ |
1.15 |
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$ |
1.15 |
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$ |
1.00 |
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$ |
1.00 |
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$ |
1.00 |
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$ |
1.00 |
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Gas Hedges (basis differential) |
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Q3 2023 |
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Q4 2023 |
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Q1 2024 |
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Q2 2024 |
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Q3 2024 |
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Q4 2024 |
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Q1 2025 |
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Q2 2025 |
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Q3 2025 |
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Q4 2025 |
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| Waha basis swaps: |
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| Hedged volume (MMBtu) |
332,855 |
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|
324,021 |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Weighted average spread price (1)
|
$ |
0.55 |
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$ |
0.55 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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| El Paso Permian Basin basis swaps: |
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| Hedged volume (MMBtu) |
329,529 |
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|
459,683 |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Weighted average spread price (1)
|
$ |
0.63 |
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$ |
0.63 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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