Derivative Instruments

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Oil and Natural Gas Contracts

The Company uses commodity based derivative contracts to reduce exposure to fluctuations in oil and natural gas prices. While the use of these contracts limits the downside risk for adverse price changes, their use also limits future revenues from favorable price changes. We have not designated our derivative contracts as hedges for accounting purposes, and therefore changes in the fair value of derivatives are included and recognized in other income (expense) in the condensed consolidated statement of operations.

As of September 30, 2022, the Company's oil and natural gas derivative instruments consisted of fixed price swaps, costless collars, and basis protection swaps. The following table summarizes the open financial derivative positions as of September 30, 2022, related to oil and natural gas production:


		Weighted Average Price
Calendar Quarter / Year	Notional Volume	Fixed		Put		Call
		($ per unit)
Oil Swaps (Bbl)



Q4 2022	270,000	$	56.03	$	—	$	—
2023	720,000	$	53.27	$	—	$	—

Natural Gas Swaps (Mcf)



Q4 2022	540,000	$	3.26	$	—	$	—

Oil Collars (Bbl)



Q4 2022	90,000	$	—	$	35.00	$	42.63
2023	—	$	—	$	—	$	—
2024	3,000	$	—	$	50.00	$	88.00

Oil Basis (Bbl)



Q4 2022	240,000	$	0.41	$	—	$	—

Interest Rate Contracts

The Company has entered into floating-to-fixed interest rate swaps, in which it receives a floating market rate equal to one-month LIBOR and pays a fixed interest rate, to manage interest rate exposure related to the Company's revolving credit facility.

The following table summarizes the open interest rate derivative positions as of September 30, 2022:


Open Coverage Period	Notional Amount		Fixed Rate
	(In thousands)
Floating-to-Fixed Interest Rate Swaps


October 2022 - September 2023	$	40,000	0.24	%

Balance Sheet Presentation of Derivatives

The following tables present the location and fair value of the Company’s derivative contracts included in the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021:


	September 30, 2022
Balance Sheet Classification	Gross Fair Value		Amounts Netted		Net Fair Value
	(In thousands)
Current derivative assets	$	1,611	$	(4)	$	1,607
Non-current derivative assets	17		(17)		—
Current derivative liabilities	(22,533)		4		(22,529)
Non-current derivative liabilities	(2,440)		17		(2,423)
Total	$	(23,345)	$	—	$	(23,345)

	December 31, 2021
Balance Sheet Classification	Gross Fair Value		Amounts Netted		Net Fair Value
	(In thousands)
Current derivative assets	$	281	$	(198)	$	83
Non-current derivative assets	267		—		267
Current derivative liabilities	(31,182)		198		(30,984)
Non-current derivative liabilities	(9,515)		—		(9,515)
Total	$	(40,149)	$	—	$	(40,149)

The following table presents the components of the Company's gain (loss) on derivatives for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In thousands)
Settlements on derivative contracts	$	(17,040)	$	(11,171)	$	(61,198)	$	(21,477)
Non-cash gain (loss) on derivatives	34,640		(3,816)		16,803		(53,809)
Gain (loss) on derivatives	$	17,600	$	(14,987)	$	(44,395)	$	(75,286)