DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
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12 Months Ended |
Dec. 31, 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 Balance Sheets for the periods indicated.
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As of December 31, |
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2023 |
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2022 |
| Commodity derivative instruments, marked to market: |
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| Derivative assets, current |
7,768,697 |
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16,193,327 |
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| Discounted deferred premiums |
(1,553,323) |
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(11,524,165) |
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| Derivatives assets, current, net of premiums |
$ |
6,215,374
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$ |
4,669,162
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| Derivative assets, noncurrent |
11,634,714 |
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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 |
$ |
11,634,714
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$ |
6,129,410
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| Derivative liabilities, current |
$ |
7,520,336
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$ |
13,345,619
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| Derivative liabilities, noncurrent |
$ |
11,510,368
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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 Statements of Operations are as follows for the respective periods:
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For the years ended December 31, |
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2023 |
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2022 |
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2021 |
| Oil derivatives: |
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Realized loss on oil derivatives |
$ |
(11,364,484) |
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$ |
(61,875,870) |
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$ |
(53,511,332) |
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| Unrealized gain (loss) on oil derivatives |
9,462,374 |
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40,546,123 |
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(24,143,120) |
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Loss on oil derivatives |
$ |
(1,902,110) |
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$ |
(21,329,747) |
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$ |
(77,654,452) |
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| Natural gas derivatives: |
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| Realized gain (loss) on natural gas derivatives |
2,279,564 |
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(650,084) |
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743,178 |
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| Unrealized gain (loss) on natural gas derivatives |
2,389,708 |
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447,172 |
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(941,867) |
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| Gain (loss) on natural gas derivatives |
$ |
4,669,272 |
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$ |
(202,912) |
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$ |
(198,689) |
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| Gain (loss) on derivative contracts |
$ |
2,767,162 |
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$ |
(21,532,659) |
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$ |
(77,853,141) |
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| Schedule of Components of Cash (Paid) Received for Commodity Derivative Settlements |
The components of “Cash (paid) received for derivative settlements, net” within the Statements of Cash Flows are as follows for the respective periods:
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For the years ended December 31, |
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2023 |
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2022 |
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2021 |
| Cash flows from operating activities |
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Cash paid for oil derivatives |
$ |
(11,364,484) |
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$ |
(61,875,870) |
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$ |
(53,511,332) |
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| Cash (paid) received on natural gas derivatives |
2,279,564 |
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(650,084) |
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743,178 |
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| Cash paid for derivative settlements, net |
$ |
(9,084,920) |
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$ |
(62,525,954) |
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$ |
(52,768,154) |
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| Derivatives Not Designated as Hedging Instruments |
The following tables reflect the details of current derivative contracts as of December 31, 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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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) |
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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184,000 |
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— |
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| Weighted average swap price |
$ |
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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$ |
73.35 |
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$ |
— |
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| Deferred premium puts: |
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| Hedged volume (Bbl) |
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 |
$ |
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 |
$ |
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) |
371,453 |
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334,947 |
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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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225,400 |
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404,800 |
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| Weighted average put price |
$ |
64.27 |
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$ |
64.32 |
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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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$ |
65.00 |
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$ |
60.00 |
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| Weighted average call price |
$ |
79.92 |
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$ |
79.16 |
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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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$ |
78.91 |
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$ |
75.68 |
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Gas Hedges (Henry Hub) |
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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) |
101,615 |
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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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285,200 |
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— |
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| Weighted average swap price |
$ |
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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$ |
3.73 |
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$ |
— |
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Two-way collars: |
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| Hedged volume (MMBtu) |
417,000 |
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605,150 |
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584,200 |
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27,600 |
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27,000 |
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27,300 |
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308,200 |
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598,000 |
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| Weighted average put price |
$ |
3.94 |
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$ |
3.94 |
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$ |
3.94 |
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$ |
3.00 |
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$ |
3.00 |
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$ |
3.00 |
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$ |
3.00 |
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$ |
3.00 |
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| Weighted average call price |
$ |
6.15 |
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$ |
6.16 |
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$ |
6.17 |
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$ |
4.15 |
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$ |
4.15 |
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$ |
4.15 |
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$ |
4.75 |
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$ |
4.15 |
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Oil Hedges (basis differential) |
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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 (Bbl) |
240,000 |
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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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$ |
1.15 |
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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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(1) The oil basis swap hedges are calculated as the fixed price (weighted average spread price above) less the difference between WTI Midland and WTI Cushing, in the issue of Argus Americas Crude.
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