SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company operates in two business segments: (i) exploration and production and (ii) midstream. The exploration and production segment is engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States and is currently focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The Company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. The midstream segment conducts midstream operations in support of the Company’s exploration, development and production operations and provides natural gas processing, oil transportation services, oil, natural gas and produced water gathering services and produced water disposal services to third parties. The majority of the Company’s midstream operations in the Rustler Breaks, Wolf and Stateline asset areas and the Greater Stebbins Area in the Delaware Basin are conducted through San Mateo. In addition, at September 30, 2023, the Company operated a cryogenic gas processing plant, compressor stations and a natural gas gathering pipeline system in Lea and Eddy Counties, New Mexico through Pronto Midstream, LLC (“Pronto”), which is a wholly-owned subsidiary of the Company. Neither San Mateo nor Pronto is a guarantor of the 2026 Notes or the 2028 Notes.

The following tables present selected financial information for the periods presented regarding the Company’s business segments on a stand-alone basis, corporate expenses that are not allocated to a segment and the consolidation and elimination entries necessary to arrive at the financial information for the Company on a consolidated basis (in thousands). On a consolidated basis, midstream services revenues consist primarily of those revenues from midstream operations related to third parties, including working interest owners in the Company’s operated wells. All midstream services revenues associated with Company-owned production are eliminated in consolidation. In evaluating the operating results of the exploration and production and midstream segments, the Company does not allocate certain expenses to the individual segments, including general and administrative expenses. Such expenses are reflected in the column labeled “Corporate.”

	Exploration and Production						Consolidations and Eliminations		Consolidated Company
			Midstream		Corporate
Three Months Ended September 30, 2023
Oil and natural gas revenues	$	700,227	$	1,300	$	—	$	—	$	701,527
Midstream services revenues	—		89,300		—		(59,369)		29,931
Sales of purchased natural gas	5,719		34,610		—		—		40,329
Realized loss on derivatives	(6,975)		—		—		—		(6,975)
Unrealized gain on derivatives	7,482		—		—		—		7,482
Expenses(1)	383,259		79,353		29,041		(59,369)		432,284
Operating income(2)	$	323,194	$	45,857	$	(29,041)	$	—	$	340,010
Total assets	$	6,246,067	$	1,131,399	$	61,697	$	—	$	7,439,163
Capital expenditures(3)	$	249,293	$	55,922	$	486	$	—	$	305,701

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(1)Includes depletion, depreciation and amortization expenses of $182.2 million and $10.3 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.3 million.

(2)Includes $14.7 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.

(3)Includes $53.3 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $14.1 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.

	Exploration and Production						Consolidations and Eliminations		Consolidated Company
			Midstream		Corporate
Three Months Ended September 30, 2022
Oil and natural gas revenues	$	746,874	$	4,570	$	—	$	—	$	751,444
Midstream services revenues	—		75,844		—		(51,137)		24,707
Sales of purchased natural gas	51,563		26,380		—		—		77,943
Realized loss on derivatives	(56,263)		—		—		—		(56,263)
Unrealized gain on derivatives	43,097		—		—		—		43,097
Expenses(1)	318,746		66,270		23,775		(51,137)		357,654
Operating income(2)	$	466,525	$	40,524	$	(23,775)	$	—	$	483,274
Total assets	$	3,900,138	$	997,839	$	407,173	$	—	$	5,305,150
Capital expenditures(3)	$	302,499	$	27,851	$	407	$	—	$	330,757

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(1)Includes depletion, depreciation and amortization expenses of $109.1 million and $9.2 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.6 million.

(2)Includes $16.5 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.

(3)Includes $60.7 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $13.2 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.

	Exploration and Production						Consolidations and Eliminations		Consolidated Company
			Midstream		Corporate
Nine Months Ended September 30, 2023
Oil and natural gas revenues	$	1,788,307	$	4,046	$	—	$	—	$	1,792,353
Midstream services revenues	—		243,764		—		(157,247)		86,517
Sales of purchased natural gas	17,094		89,387		—		—		106,481
Realized loss on derivatives	(6,454)		—		—		—		(6,454)
Unrealized loss on derivatives	(8,244)		—		—		—		(8,244)
Expenses(1)	992,351		219,324		72,514		(157,247)		1,126,942
Operating income(2)	$	798,352	$	117,873	$	(72,514)	$	—	$	843,711
Total assets	$	6,246,067	$	1,131,399	$	61,697	$	—	$	7,439,163
Capital expenditures(3)	$	2,465,477	$	151,331	$	2,964	$	—	$	2,619,772

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(1)Includes depletion, depreciation and amortization expenses of $466.2 million and $29.5 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $1.0 million.

(2)Includes $42.9 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.

(3)Includes $1.67 billion attributable to land and seismic acquisition expenditures related to the exploration and production segment, $63.6 million attributable to midstream acquisition expenditures and $25.4 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.

	Exploration and Production						Consolidations and Eliminations		Consolidated Company
			Midstream		Corporate
Nine Months Ended September 30, 2022
Oil and natural gas revenues	$	2,261,395	$	9,333	$	—	$	—	$	2,270,728
Midstream services revenues	—		218,279		—		(154,380)		$	63,899
Sales of purchased natural gas	103,217		54,073		—		—		$	157,290
Realized loss on derivatives	(139,865)		—		—		—		$	(139,865)
Unrealized loss on derivatives	(1,502)		—		—		—		$	(1,502)
Expenses(1)	888,796		157,767		70,797		(154,380)		$	962,980
Operating income(2)	$	1,334,449	$	123,918	$	(70,797)	$	—	$	1,387,570
Total assets	$	3,900,138	$	997,839	$	407,173	$	—	$	5,305,150
Capital expenditures(3)	$	714,987	$	138,975	$	690	$	—	$	854,652

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(1)Includes depletion, depreciation and amortization expenses of $307.5 million and $25.5 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $1.8 million.

(2)Includes $54.0 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.

(3)Includes $131.4 million attributable to land and seismic acquisition expenditures related to the exploration and production segment, $75.0 million in midstream acquisition expenditures and $30.7 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.