DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
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9 Months Ended |
Sep. 30, 2024 |
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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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September 30, 2024 |
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December 31, 2023 |
| Commodity derivative instruments, marked to market: |
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| Derivative assets, current |
$ |
8,605,087 |
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$ |
7,768,697 |
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| Discounted deferred premiums |
(229,103) |
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(1,553,323) |
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| Derivatives assets, current, net of premiums |
$ |
8,375,984
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$ |
6,215,374
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Derivative assets, noncurrent |
$ |
8,735,674
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$ |
11,634,714
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| Derivative liabilities, current |
$ |
3,929,188
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$ |
7,520,336
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| Derivative liabilities, noncurrent |
$ |
4,535,777
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$ |
11,510,368
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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 Nine Months Ended |
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September 30, 2024 |
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September 30, 2023 |
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September 30, 2024 |
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September 30, 2023 |
| Oil derivatives: |
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| Realized gain (loss) on oil derivatives |
$ |
(3,109,660) |
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$ |
(5,825,427) |
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$ |
(9,921,757) |
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$ |
(7,323,030) |
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| Unrealized gain (loss) on oil derivatives |
27,238,245 |
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(34,077,473) |
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12,552,517 |
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(21,425,316) |
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| Gain (loss) on oil derivatives |
$ |
24,128,585 |
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$ |
(39,902,900) |
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$ |
2,630,760 |
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$ |
(28,748,346) |
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| Natural gas derivatives: |
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| Realized gain (loss) on natural gas derivatives |
1,226,895 |
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474,629 |
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$ |
3,982,980 |
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$ |
1,493,302 |
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| Unrealized gain (loss) on natural gas derivatives |
(623,855) |
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205,516 |
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(2,725,209) |
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771,854 |
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| Gain (loss) on natural gas derivatives |
$ |
603,040 |
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$ |
680,145 |
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$ |
1,257,771 |
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$ |
2,265,156 |
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| Gain (loss) on derivative contracts |
$ |
24,731,625 |
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$ |
(39,222,755) |
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$ |
3,888,531 |
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$ |
(26,483,190) |
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| Schedule of Components of Cash (Paid) Received for Commodity Derivative Settlements |
The components of “Cash received (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 Nine Months Ended |
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September 30, 2024 |
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September 30, 2023 |
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September 30, 2024 |
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September 30, 2023 |
| Cash flows from operating activities |
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| Cash received (paid) for oil derivatives |
$ |
(3,109,660) |
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$ |
(5,825,427) |
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$ |
(9,921,757) |
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$ |
(7,323,030) |
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| Cash received (paid) for natural gas derivatives |
1,226,895 |
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474,629 |
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3,982,980 |
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1,493,302 |
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| Cash received (paid) for derivative settlements, net |
$ |
(1,882,765) |
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$ |
(5,350,798) |
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$ |
(5,938,777) |
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$ |
(5,829,728) |
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| Derivatives Not Designated as Hedging Instruments |
The following tables reflect the details of current derivative contracts as of September 30, 2024 (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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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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Q1 2026 |
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Q2 2026 |
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Q3 2026 |
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| Swaps: |
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| Hedged volume (Bbl) |
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368,000 |
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71,897 |
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52,063 |
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265,517 |
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64,555 |
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449,350 |
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432,701 |
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— |
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| Weighted average swap price |
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$ |
68.43 |
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$ |
72.03 |
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$ |
72.03 |
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$ |
72.94 |
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$ |
72.03 |
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$ |
70.38 |
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$ |
69.53 |
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$ |
— |
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| Deferred premium puts: |
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| Hedged volume (Bbl) |
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88,405 |
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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 strike price |
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$ |
75.00 |
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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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| Weighted average deferred premium price |
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$ |
2.61 |
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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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| Two-way collars: |
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| Hedged volume (Bbl) |
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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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— |
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— |
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379,685 |
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| Weighted average put price |
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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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$ |
— |
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$ |
— |
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$ |
60.00 |
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| Weighted average call price |
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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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$ |
— |
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$ |
— |
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$ |
72.50 |
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Gas Hedges (Henry Hub) |
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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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Q1 2026 |
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Q2 2026 |
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Q3 2026 |
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| NYMEX Swaps: |
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| Hedged volume (MMBtu) |
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431,800 |
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616,199 |
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594,400 |
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289,550 |
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— |
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— |
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532,500 |
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— |
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| Weighted average swap price |
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$ |
4.44 |
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$ |
3.78 |
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$ |
3.43 |
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$ |
3.72 |
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$ |
— |
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$ |
— |
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$ |
3.38 |
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$ |
— |
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| Two-way collars: |
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| Hedged volume (MMBtu) |
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18,300 |
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33,401 |
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27,300 |
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308,200 |
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598,000 |
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553,500 |
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— |
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515,728 |
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| Weighted average put price |
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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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$ |
3.50 |
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$ |
— |
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$ |
3.00 |
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| Weighted average call price |
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$ |
4.15 |
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$ |
4.39 |
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$ |
4.15 |
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$ |
4.75 |
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$ |
4.15 |
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$ |
5.03 |
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$ |
— |
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$ |
3.93 |
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Oil Hedges (basis differential) |
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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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Q1 2026 |
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Q2 2026 |
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Q3 2026 |
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| Argus basis swaps: |
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Hedged volume (Bbl) |
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244,000 |
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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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— |
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— |
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— |
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Weighted average spread price (1)
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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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$ |
— |
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$ |
— |
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$ |
— |
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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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