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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The following presents the impact of this presentation to the Company’s recognized assets and liabilities for the periods indicated:


	As of September 30, 2022
	Presented without		As Presented with
	Effects of Netting	Effects of Netting	Effects of Netting
	(In thousands)
Derivative Assets
Fair value of derivatives - current	$74,016	($59,272)	$14,744
Other assets, net	$13,520	($12,131)	$1,389

Derivative Liabilities
Fair value of derivatives - current	($107,969)	$59,272	($48,697)
Fair value of derivatives - non-current	($21,735)	$12,131	($9,604)


	As of December 31, 2021
	Presented without		As Presented with
	Effects of Netting	Effects of Netting	Effects of Netting
	(In thousands)
Assets
Commodity derivative instruments	$25,469	($23,921)	$1,548
Contingent consideration arrangements	20,833	—	20,833
Fair value of derivatives - current	$46,302	($23,921)	$22,381
Commodity derivative instruments	$1,119	($869)	$250
Contingent consideration arrangements	—	—	—
Other assets, net	$1,119	($869)	$250

Liabilities
Commodity derivative instruments (1)	($184,898)	$23,921	($160,977)
Contingent consideration arrangements	(25,000)	—	(25,000)
Fair value of derivatives - current	($209,898)	$23,921	($185,977)
Commodity derivative instruments	($12,278)	$869	($11,409)
Contingent consideration arrangements	—	—	—

Fair value of derivatives - non-current	($12,278)	$869	($11,409)

(1) Includes approximately $2.9 million of deferred premiums, which will be paid as the applicable contracts settle.

Schedule of Offsetting Liabilities

The following presents the impact of this presentation to the Company’s recognized assets and liabilities for the periods indicated:


	As of September 30, 2022
	Presented without		As Presented with
	Effects of Netting	Effects of Netting	Effects of Netting
	(In thousands)
Derivative Assets
Fair value of derivatives - current	$74,016	($59,272)	$14,744
Other assets, net	$13,520	($12,131)	$1,389

Derivative Liabilities
Fair value of derivatives - current	($107,969)	$59,272	($48,697)
Fair value of derivatives - non-current	($21,735)	$12,131	($9,604)


	As of December 31, 2021
	Presented without		As Presented with
	Effects of Netting	Effects of Netting	Effects of Netting
	(In thousands)
Assets
Commodity derivative instruments	$25,469	($23,921)	$1,548
Contingent consideration arrangements	20,833	—	20,833
Fair value of derivatives - current	$46,302	($23,921)	$22,381
Commodity derivative instruments	$1,119	($869)	$250
Contingent consideration arrangements	—	—	—
Other assets, net	$1,119	($869)	$250

Liabilities
Commodity derivative instruments (1)	($184,898)	$23,921	($160,977)
Contingent consideration arrangements	(25,000)	—	(25,000)
Fair value of derivatives - current	($209,898)	$23,921	($185,977)
Commodity derivative instruments	($12,278)	$869	($11,409)
Contingent consideration arrangements	—	—	—

Fair value of derivatives - non-current	($12,278)	$869	($11,409)

(1) Includes approximately $2.9 million of deferred premiums, which will be paid as the applicable contracts settle.

Schedule of Gain or Loss on Derivative Contracts

The components of “(Gain) loss on derivative contracts” are as follows for the respective periods:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
	(In thousands)
(Gain) loss on oil derivatives	($157,731)	$67,198	$243,527	$393,792
Loss on natural gas derivatives	22,881	33,026	56,800	48,539
Loss on NGL derivatives	—	10,242	4,771	15,114
Gain on contingent consideration arrangements	—	(3,297)	—	(680)
Loss on September 2020 Warrants liability (1)	—	—	—	55,390
(Gain) loss on derivative contracts	($134,850)	$107,169	$305,098	$512,155

(1) Further details of the Company’s September 2020 Warrants and the loss on the associated September 2020 Warrants liability are described in “Note 7 - Borrowings”, “Note 8 - Derivative Instruments and Hedging Activities” and “Note 9 - Fair Value Measurements” of the Notes to Consolidated Financial Statements in its 2021 Annual Report.

Schedule of Derivative Instruments

The components of “Cash paid for commodity derivative settlements, net” and “Cash received (paid) for settlements of contingent consideration arrangements, net” are as follows for the respective periods:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
	(In thousands)
Cash flows from operating activities
Cash paid on oil derivatives	($117,024)	($98,752)	($374,711)	($221,112)
Cash paid on natural gas derivatives	(28,572)	(9,592)	(55,024)	(12,867)
Cash paid on NGL derivatives	—	(2,463)	(3,783)	(4,399)
Cash paid for commodity derivative settlements, net	($145,596)	($110,807)	($433,518)	($238,378)
Cash received for settlements of contingent consideration arrangements, net	$—	$—	$6,492	$—

Cash flows from investing activities
Cash paid for settlement of contingent consideration arrangement	$—	$—	($19,171)	$—

Cash flows from financing activities
Cash received for settlement of contingent consideration arrangement	$—	$—	$8,512	$—

Schedule of Outstanding Oil and Natural Gas Derivative Contracts

Listed in the tables below are the outstanding oil and natural gas derivative contracts as of September 30, 2022:


	For the Remainder	For the Full Year	For the Full Year
Oil Contracts (WTI)	2022	2023	2024
Swap Contracts
Total volume (Bbls)	1,978,000	1,722,500	—
Weighted average price per Bbl	$67.29	$81.46	$—
Collar Contracts (Three-Way Collars)
Total volume (Bbls)	—	1,825,000	—
Weighted average price per Bbl
Ceiling (short call)	$—	$90.00	$—
Floor (long put)	$—	$70.00	$—
Floor (short put)	$—	$50.00	$—
Collar Contracts (Two-Way Collars)
Total volume (Bbls)	1,196,000	2,730,000	—
Weighted average price per Bbl
Ceiling (short call)	$70.12	$87.15	$—
Floor (long put)	$60.00	$71.92	$—






Short Call Swaption Contracts (1)
Total volume (Bbls)	—	—	1,830,000
Weighted average price per Bbl	$—	$—	$80.30











Oil Contracts (Midland Basis Differential)
Swap Contracts
Total volume (Bbls)	598,000	—	—
Weighted average price per Bbl	$0.50	$—	$—

(1) The 2024 short call swaption contracts have exercise expiration dates of December 29, 2023.


	For the Remainder	For the Full Year
Natural Gas Contracts (Henry Hub)	2022	2023
Swap Contracts
Total volume (MMBtu)	1,550,000	—
Weighted average price per MMBtu	$3.62	$—
Collar Contracts
Total volume (MMBtu)	3,670,000	6,640,000
Weighted average price per MMBtu
Ceiling (short call)	$6.91	$6.60
Floor (long put)	$4.67	$4.48




Natural Gas Contracts (Waha Basis Differential)
Swap Contracts
Total volume (MMBtu)	1,220,000	6,080,000
Weighted average price per MMBtu	($0.75)	($0.75)

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

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+ Details