Annual report [Section 13 and 15(d), not S-K Item 405]

SEGMENT REPORTING

v3.25.0.1
SEGMENT REPORTING
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
SEGMENT REPORTING
NOTE 15 — SEGMENT REPORTING
In accordance with ASU 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," the Company has performed an assessment of its reporting to comply with the new requirements for the fiscal year beginning January 1, 2024. The Company's operations consist of the exploration, production, and sale of oil, natural gas, and NGLs, primarily within the Permian Basin of Texas, and is regulated by the Texas RRC. The Company operates different areas within the Permian Basin, including the Northwest Shelf and Central Basin Platform.
The Company's operations and financials are managed by one cohesive group of individuals, identified as the chief operating decision maker ("CODM"), consisting of the Chairman of the Board and Chief Executive Officer; Executive Vice President and Chief Financial Officer; Executive Vice President of Engineering and Corporate Strategy; Executive Vice President of Exploration and Geosciences; and Vice President of Operations. The CODM group reviews the Company's operating results, including condensed financial statements on a monthly basis for evaluating performance and determining resource allocation. The significant expense categories provided to the CODM include lease operating expenses; gathering, transportation and processing costs; ad valorem taxes; and oil and natural gas production taxes. Each of these costs are deducted from oil, natural gas, and natural gas liquids revenues by operating segment to arrive at operating segment profit, used to assess performance.
The Company assessed whether its operating segments exhibited similar economic characteristics and whether its operating segments had a similar nature of products, services, production processes, purchaser types/classes, product distribution, and regulatory environment. Each operating segment has similar products (oil, natural gas, and NGLs), similar production processes, similar types of purchasers (midstream companies, or companies with midstream components), similar methods of product delivery, and is governed by the same regulations. After a thorough analysis of each of these factors with regards to the Company's operating segments, it has been determined that it is appropriate to aggregate its operating segments into a single reportable segment, Exploration and Production, which includes all of its revenues, lease operating expenses, gathering, transportation and processing costs, ad valorem taxes, and oil and natural gas production taxes. Refer to table below.
For the years ended December 31,
2024 2023 2022
Exploration and Production
Oil, natural gas, and natural gas liquids revenues (1)
$ 366,327,414  $ 361,056,001  $ 347,249,537 
Lease operating expenses (2)
(78,310,949) (70,158,227) (47,695,351)
Gathering, transportation and processing costs (506,333) (457,573) (1,830,024)
Ad valorem taxes (8,069,064) (6,757,841) (4,670,617)
Oil and natural gas production taxes (16,116,565) (18,135,336) (17,125,982)
Exploration and Production segment profit $ 263,324,503  $ 265,547,024  $ 275,927,563 
(1) All of the Company's revenues are within the Permian Basin within the United States.
(2) The CODM also reviews the following cost categories within lease operating expenses. Refer to the following table.
For the years ended December 31,
2024 2023 2022
Lease operating expenses:
Workovers $ 15,150,944  $ 14,919,560  $ 7,443,031 
Other lease operating expenses $ 63,160,005  $ 55,238,667  $ 40,252,320 
Total lease operating expenses $ 78,310,949  $ 70,158,227  $ 47,695,351 
The following tables include a reconciliation of the total reportable segments' measures of profit or loss to the Company's consolidated income before income taxes. Additionally included is a reconciliation between the reportable segments' assets to the Company's consolidated assets.
For the year ended December 31, 2024
Exploration and Production Corporate Total Company
Oil, Natural Gas, and Natural Gas Liquids Revenues $ 366,327,414  $ —  $ 366,327,414 
Lease operating expenses (78,310,949) —  (78,310,949)
Gathering, transportation and processing costs (506,333) —  (506,333)
Ad valorem taxes (8,069,064) —  (8,069,064)
Oil and natural gas production taxes (16,116,565) —  (16,116,565)
Depreciation, depletion and amortization (3)
—  (98,702,843) (98,702,843)
Asset retirement obligation accretion —  (1,380,298) (1,380,298)
Operating lease expense —  (700,362) (700,362)
General and administrative expense —  (29,640,300) (29,640,300)
Interest income —  491,946  491,946 
Interest (expense) —  (43,311,810) (43,311,810)
Gain (loss) on derivative contracts —  (2,365,917) (2,365,917)
Gain (loss) on disposal of assets —  89,693  89,693 
Other income —  106,656  106,656 
Income (Loss) Before Benefit from (Provision for) Income Taxes $ 263,324,503  $ (175,413,235) $ 87,911,268 
Total Assets (3)
$ 1,381,583,504  $ 26,515,970  $ 1,408,099,474 
Capital expenditures $ 151,946,171  $ —  $ 151,946,171 
(3) All of the Company's assets are located within the United States. As the CODM does not view depreciation, depletion and amortization as a significant Exploration and Production segment expense, the Company has included this expense within the Corporate column of the reconciliation table.
For the year ended December 31, 2023
Exploration and Production Corporate Total Company
Oil, Natural Gas, and Natural Gas Liquids Revenues $ 361,056,001  $ —  $ 361,056,001 
Lease operating expenses (70,158,227) —  (70,158,227)
Gathering, transportation and processing costs (457,573) —  (457,573)
Ad valorem taxes (6,757,841) —  (6,757,841)
Oil and natural gas production taxes (18,135,336) —  (18,135,336)
Depreciation, depletion and amortization (3)
—  (88,610,291) (88,610,291)
Asset retirement obligation accretion —  (1,425,686) (1,425,686)
Operating lease expense —  (541,801) (541,801)
General and administrative expense —  (29,188,755) (29,188,755)
Interest income —  257,155  257,155 
Interest (expense) —  (43,926,732) (43,926,732)
Gain (loss) on derivative contracts —  2,767,162  2,767,162 
Gain (loss) on disposal of assets —  (87,128) (87,128)
Other income —  198,935  198,935 
Income (Loss) Before Benefit from (Provision for) Income Taxes $ 265,547,024  $ (160,557,141) $ 104,989,883 
Total Assets (3)
$ 1,338,584,701  $ 37,911,691  $ 1,376,496,392 
Capital expenditures $ 151,969,735  $ —  $ 151,969,735 
For the year ended December 31, 2022
Exploration and Production Corporate Total Company
Oil, Natural Gas, and Natural Gas Liquids Revenues $ 347,249,537  $ —  $ 347,249,537 
Lease operating expenses (47,695,351) —  (47,695,351)
Gathering, transportation and processing costs (1,830,024) —  (1,830,024)
Ad valorem taxes (4,670,617) —  (4,670,617)
Oil and natural gas production taxes (17,125,982) —  (17,125,982)
Depreciation, depletion and amortization (3)
—  (55,740,767) (55,740,767)
Asset retirement obligation accretion —  (983,432) (983,432)
Operating lease expense —  (363,908) (363,908)
General and administrative expense —  (27,095,323) (27,095,323)
Interest income —  4  4 
Interest (expense) —  (23,167,729) (23,167,729)
Gain (loss) on derivative contracts —  (21,532,659) (21,532,659)
Income (Loss) Before Benefit from (Provision for) Income Taxes $ 275,927,563  $ (128,883,814) $ 147,043,749 
Total Assets (3)
$ 1,229,752,442  $ 39,247,355  $ 1,268,999,797 
Capital expenditures $ 140,051,159  $ —  $ 140,051,159 
The following table discloses the purchasers from which 10% or more of revenues were derived in the years noted.
For the years ended December 31,
2024 2023 2022
Purchasers with 10% or more percentage of total revenue (4)
Phillips 66 Company ("Phillips") 61  % 66  % 68  %
Concord Energy LLC 14  %
LPC Crude III, LLC 13  %
NGL Crude Partners ("NGL Crude") 10  % 10  % 13  %
Enterprise Crude Oil LLC ("Enterprise") 12  % 5  %
(4) All the Company's purchasers are within the Exploration and Production operating segment.