DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

At March 31, 2023, the Company had one natural gas basis swap contract open and in place to mitigate its exposure to natural gas price volatility, with a specific term (calculation period), notional quantity (volume hedged) and fixed price. At March 31, 2023, the contract was set to expire during the fourth quarter of 2023. The Company had no open contracts associated with oil or natural gas liquids prices at March 31, 2023.

The following is a summary of the Company’s open basis swap contract at March 31, 2023.


Commodity	Calculation Period	Notional Quantity (MMBtu)	Fixed Price ($/MMBtu)		Fair Value of Asset (Liability) (thousands)

Natural Gas Basis	04/01/2023 - 12/31/2023	13,750,000	$	(1.85)	$	(3,136)
Total open basis swap contracts					$	(3,136)

The Company’s derivative financial instruments are subject to master netting arrangements, and the Company’s counterparties allow for cross-commodity master netting provided the settlement dates for the commodities are the same. The Company does not present different types of commodities with the same counterparty on a net basis in its interim unaudited condensed consolidated balance sheets.

The following table presents the gross asset and liability fair values of the Company’s commodity price derivative financial instruments and the location of these balances in the interim unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022 (in thousands).


Derivative Instruments	Gross amounts recognized		Gross amounts netted in the condensed consolidated balance sheets		Net amounts presented in the condensed consolidated balance sheets
March 31, 2023


Current liabilities	$	(3,136)	$	—	$	(3,136)

Total	$	(3,136)	$	—	$	(3,136)
December 31, 2022
Current assets	$	3,931	$	—	$	3,931



Total	$	3,931	$	—	$	3,931

The following table summarizes the location and aggregate gain (loss) of all derivative financial instruments recorded in the interim unaudited condensed consolidated statements of operations for the periods presented (in thousands).


		Three Months Ended March 31,
Type of Instrument	Location in Condensed Consolidated Statement of Operations	2023		2022
Derivative Instrument
Oil	Revenues: Realized loss on derivatives	$	—	$	(18,166)
Natural Gas	Revenues: Realized gain (loss) on derivatives	3,669		(4,273)

Realized gain (loss) on derivatives		3,669		(22,439)
Oil	Revenues: Unrealized loss on derivatives	—		(44,999)
Natural Gas	Revenues: Unrealized loss on derivatives	(7,067)		(30,030)

Unrealized loss on derivatives		(7,067)		(75,029)
Total		$	(3,398)	$	(97,468)