09/19/2024 | Press release | Distributed by Public on 09/19/2024 14:26
Page
|
|
Consolidated Balance Sheets
|
1
|
Consolidated Statements of Operations and Comprehensive Income (loss)
|
2
|
Consolidated Statements of Members' Equity and Accumulated Other Comprehensive Income (loss)
|
3
|
Consolidated Statements of Cash Flows
|
4
|
Notes to Consolidated Financial Statements
|
5
|
Note A - Organization and Summary of Significant Accounting Policies
|
5
|
Note B - Concentration of Credit Risk
|
11
|
Note C - Related Party Transactions
|
11
|
Note D - Oil and Natural Gas Properties, Other Property and Equipment and Lease Information
|
13
|
Note E - Debt
|
15
|
Note F - Significant Customers
|
17
|
Note G - Asset Retirement Obligations (ARO)
|
17
|
Note H - Derivative Contracts
|
17
|
Note I - Commitments and Contingencies
|
20
|
Note J - Fair Value
|
21
|
Note K - Employee Benefit Plans
|
22
|
Note L - Employee Incentive Plans
|
22
|
Note M - Income Taxes
|
23
|
Note N - Members' Equity
|
23
|
Note O - Subsequent Events
|
23
|
June 30,
|
December 31,
|
|||||||
ASSETS
|
2024
|
2023
|
||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
895
|
$
|
690
|
||||
Receivables:
|
||||||||
Accrued oil and natural gas revenues
|
726
|
727
|
||||||
Joint interest billings, net of allowance for credit loss accounts of
$12 million and $12 million, respectively
|
48
|
29
|
||||||
Related parties (Note C), net of allowance for credit loss accounts of $1 million and $1 million, respectively
|
39
|
32
|
||||||
Accounts receivable - other
|
9
|
9
|
||||||
Total receivables, net
|
822
|
797
|
||||||
Inventories
|
84
|
83
|
||||||
Derivative contracts - short-term (Note H)
|
30
|
46
|
||||||
Prepaid expenses and other assets
|
18
|
17
|
||||||
Total current assets
|
1,849
|
1,633
|
||||||
PROPERTY AND EQUIPMENT:
|
||||||||
Oil and natural gas property and equipment, full cost method, net ($254 million and $176 million excluded from amortization, respectively) (Note D)
|
9,687
|
8,917
|
||||||
Other property and equipment, net (Note D)
|
575
|
571
|
||||||
OTHER NON-CURRENT ASSETS:
|
||||||||
Related parties (Note C)
|
5
|
8
|
||||||
Derivative instruments - long-term (Note H)
|
8
|
9
|
||||||
Other
|
70
|
62
|
||||||
Total Assets
|
$
|
12,194
|
$
|
11,200
|
||||
LIABILITIES AND MEMBERS' EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable:
|
||||||||
Trade
|
350
|
459
|
||||||
Oil and gas revenue
|
759
|
704
|
||||||
Accrued expenses
|
162
|
231
|
||||||
Distributions payable
|
231
|
-
|
||||||
Taxes payable
|
161
|
2
|
||||||
Derivative contracts (Note H)
|
13
|
9
|
||||||
Asset retirement obligations (Note G)
|
15
|
15
|
||||||
Other current liabilities
|
19
|
20
|
||||||
Total current liabilities
|
1,710
|
1,440
|
||||||
OTHER LONG-TERM LIABILITIES
|
33
|
37
|
||||||
LONG-TERM DEBT (Note E)
|
913
|
913
|
||||||
DEFERRED TAXES (Note M)
|
1,807
|
57
|
||||||
DERIVATIVE CONTRACTS (Note H)
|
-
|
1
|
||||||
ASSET RETIREMENT OBLIGATIONS (Note G)
|
257
|
245
|
||||||
COMMITMENTS AND CONTINGENCIES (Note I)
|
||||||||
MEMBERS' EQUITY
|
||||||||
Members' equity (Note N)
|
7,454
|
8,494
|
||||||
Accumulated other comprehensive (loss) income (Note H)
|
20
|
13
|
||||||
Total members' equity
|
$
|
7,474
|
$
|
8,507
|
||||
Total Liabilities and Members' Equity
|
$
|
12,194
|
$
|
11,200
|
Six Months Ended June 30,
|
||||||||
2024
|
2023
|
|||||||
Operating revenues:
|
||||||||
Oil sales
|
$
|
2,908
|
$
|
2,529
|
||||
Natural gas and NGL sales
|
291
|
334
|
||||||
Service company revenue
|
14
|
14
|
||||||
Total operating revenues
|
3,213
|
2,877
|
||||||
Operating expenses:
|
||||||||
Lease operating expense
|
389
|
337
|
||||||
Production taxes
|
149
|
139
|
||||||
Service company operating expenses
|
12
|
13
|
||||||
Depletion, depreciation, amortization and accretion
|
650
|
513
|
||||||
General and administrative expense
|
64
|
60
|
||||||
Other, net
|
-
|
(2
|
)
|
|||||
Total operating expenses
|
1,264
|
1,060
|
||||||
Income from operations
|
1,949
|
1,817
|
||||||
Other income (expense):
|
||||||||
Gain (loss) from derivative instruments, net
|
4
|
(8
|
)
|
|||||
Interest (expense) income, net
|
(12
|
)
|
6
|
|||||
Transaction costs
|
(3
|
)
|
-
|
|||||
Other income (expense)
|
(5
|
)
|
(3
|
)
|
||||
Total other income (expense)
|
(16
|
)
|
(5
|
)
|
||||
Income before taxes
|
1,933
|
1,812
|
||||||
Taxes:
|
||||||||
Provision for income taxes
|
2,052
|
13
|
||||||
Net income (loss)
|
$
|
(119
|
)
|
$
|
1,799
|
|||
Other comprehensive income (loss)
|
||||||||
Commodity cash flow hedging derivative instruments (Note H):
|
||||||||
Change in fair value of cash flow hedges, net
|
$
|
7
|
$
|
4
|
||||
Total other comprehensive net income
|
7
|
4
|
||||||
Total comprehensive income (loss)
|
$
|
(112
|
)
|
$
|
1,803
|
|
Members' Equity
|
Accumulated Other
Comprehensive
Income
(loss)
|
Total
|
|||||||||
Balance, December 31, 2022
|
$
|
7,032
|
$
|
(1
|
)
|
$
|
7,031
|
|||||
Net income
|
929
|
-
|
929
|
|||||||||
Distributions
|
(156
|
)
|
-
|
(156
|
)
|
|||||||
Cash flow hedges
|
-
|
3
|
3
|
|||||||||
Balance, March 31, 2023
|
$
|
7,805
|
$
|
2
|
$
|
7,807
|
||||||
Net income
|
870
|
-
|
870
|
|||||||||
Distributions
|
(109
|
)
|
-
|
(109
|
)
|
|||||||
Cash flow hedges
|
-
|
1
|
1
|
|||||||||
Balance, June 30, 2023
|
$
|
8,566
|
$
|
3
|
$
|
8,569
|
|
Members' Equity
|
Accumulated Other
Comprehensive
Income
(loss)
|
Total
|
|||||||||
Balance, December 31, 2023
|
$
|
8,494
|
$
|
13
|
$
|
8,507
|
||||||
Net loss
|
(912
|
)
|
-
|
(912
|
)
|
|||||||
Distributions
|
(350
|
)
|
-
|
(350
|
)
|
|||||||
Cash flow hedges
|
- |
4
|
4
|
|||||||||
Balance, March 31, 2024
|
$
|
7,232
|
$
|
17
|
$
|
7,249
|
||||||
Net income
|
793
|
-
|
793
|
|||||||||
Distributions
|
(571
|
)
|
-
|
(571
|
)
|
|||||||
Cash flow hedges, net
|
-
|
3
|
3
|
|||||||||
Balance, June 30, 2024
|
$
|
7,454
|
$
|
20
|
$
|
7,474
|
Six Months Ended June 30,
|
||||||||
2024
|
2023
|
|||||||
Cash flows from operating activities:
|
||||||||
Net (loss) income
|
$
|
(119
|
)
|
$
|
1,799
|
|||
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
||||||||
Depletion, depreciation, amortization and accretion
|
650
|
513
|
||||||
Amortization of deferred debt costs
|
-
|
1
|
||||||
Deferred taxes
|
1,750
|
7
|
||||||
Net (gain) loss on derivative instruments
|
(4
|
)
|
8
|
|||||
Net cash (payment) receipts from settled derivatives
|
31
|
4
|
||||||
Other
|
-
|
(2
|
)
|
|||||
Asset retirement expenditures
|
(24
|
)
|
(17
|
)
|
||||
Change in assets and liabilities:
|
||||||||
Accounts receivables
|
(28
|
)
|
(52
|
)
|
||||
Prepaid expenses and other assets
|
(18
|
)
|
(24
|
)
|
||||
Accounts payables and accrued liabilities
|
(60
|
)
|
56
|
|||||
(Decrease) increase in taxes payable
|
159
|
3
|
||||||
(Decrease) increase in long-term liabilities
|
15
|
-
|
||||||
Net cash provided by operating activities
|
2,352
|
2,296
|
||||||
Cash flows from investing activities:
|
||||||||
Oil and gas properties additions
|
(1,277
|
)
|
(1,553
|
)
|
||||
Property acquisitions
|
(145
|
)
|
(8
|
)
|
||||
Proceeds from sales of assets
|
15
|
7
|
||||||
Other property and equipment additions
|
(49
|
)
|
(93
|
)
|
||||
Contribution to equity method investments
|
(1
|
)
|
-
|
|||||
Net cash used in investing activities
|
(1,457
|
)
|
(1,647
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Purchases of Senior Notes
|
-
|
(71
|
)
|
|||||
Cash distributions to members
|
(690
|
)
|
(265
|
)
|
||||
Net cash used in financing activities
|
(690
|
)
|
(336
|
)
|
||||
Net (decrease) increase in cash and cash equivalents
|
205
|
313
|
||||||
Cash and cash equivalents at beginning of period
|
690
|
1,585
|
||||||
Cash and cash equivalents at end of period
|
$
|
895
|
$
|
1,898
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for interest
|
$
|
30
|
$
|
34
|
||||
Cash paid during the period for taxes
|
$
|
144
|
$
|
3
|
||||
Supplemental disclosures of noncash investing and financing activities:
|
||||||||
Addition to oil and gas properties resulting from recognition of future abandonment costs
|
$
|
28
|
$
|
11
|
||||
Decrease in accrued capital expenditures
|
$
|
(82
|
)
|
$
|
(15
|
)
|
||
Accrued distributions payable
|
$
|
231
|
$
|
-
|
||||
Net settlement of receivables for property and equipment
|
$
|
3
|
$
|
-
|
1. |
NATURE OF OPERATIONS
|
2. |
BASIS OF CONSOLIDATION
|
3. |
USE OF ESTIMATES
|
4. |
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
|
Cash and cash equivalents:
|
June 30, 2024
|
December 31, 2023
|
||||||
Cash
|
$
|
328
|
$
|
424
|
||||
Money market funds
|
567
|
266
|
||||||
Total cash and cash equivalents
|
$
|
895
|
$
|
690
|
5. |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES
|
6. |
INVENTORY
|
7. |
OIL AND NATURAL GAS PROPERTIES
|
8. |
OTHER PROPERTY AND EQUIPMENT
|
Lives
|
|
Buildings and leasehold improvements
|
10 - 30 years
|
Automobiles and light trucks
|
3 - 5 years
|
Heavy trucks and trailers
|
3 - 10 years
|
Service company equipment, pipeline and other equipment
|
3 - 15 years
|
9. |
ENVIRONMENTAL COSTS
|
10. |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
|
11. |
REVENUE RECOGNITION
|
12. |
ASSET RETIREMENT OBLIGATIONS (ARO)
|
13. |
INCOME TAXES
|
14. |
LONG-TERM DEBT PREMIUM AND DEFERRED DEBT COSTS
|
16. |
FAIR VALUE
|
Six Months Ended June 30,
|
||||||||
2024
|
2023
|
|||||||
Relationships with affiliates to purchase oil and natural gas (revenue)
|
||||||||
Oasis Transportation and Marketing Corporation
|
$
|
182
|
$
|
457
|
||||
ACME Energy Services, Inc
|
$
|
-
|
$
|
1
|
||||
Relationships with affiliates to provide services (cost)
|
||||||||
Advanced Stimulation Technologies, Inc.
|
$
|
150
|
$
|
177
|
||||
Other
|
1
|
1
|
||||||
Blue Streak Transportation, Inc.
|
-
|
1
|
||||||
$
|
151
|
$
|
179
|
Current
|
||||||||
June 30, 2024
|
December 31, 2023
|
|||||||
Related Party
|
Accounts
Receivable
|
Accounts
Receivable
|
||||||
Oasis Transportation and Marketing Corporation - Oil and natural gas sales receivable
|
$
|
34
|
$
|
28
|
||||
Employee Joint Interest Billings, net of allowance of $1 million and $1 million, respectively
|
2
|
2
|
||||||
ACME Energy Services, Inc.
|
1
|
1
|
||||||
Others
|
2
|
1
|
||||||
Total current related parties receivables
|
$
|
39
|
$
|
32
|
Non-Current
|
||||||||
June 30, 2024
|
December 31, 2023
|
|||||||
Related Party Entity
|
Accounts and Notes Receivable
|
|||||||
Autry C. Stephens
|
$
|
1
|
1
|
|||||
ACME Energy Services, Inc.
|
-
|
$
|
3
|
|||||
Other
|
-
|
1
|
||||||
Total related party receivables
|
$
|
1
|
$
|
5
|
||||
Related party investments
|
Investments
|
|||||||
Sprouts Energy LLC
|
$
|
3
|
$
|
2
|
||||
Saltwater Partners #1 SWD, LLC
|
1
|
1
|
||||||
Total related party investments
|
4
|
3
|
||||||
Total other non-current related party assets
|
$
|
5
|
$
|
8
|
|
As of June 30, 2024
|
|||||||||||||||
|
Oil and Gas
Operations
|
Oilfield
Service
Companies
|
Pipeline
Subsidiaries
|
Total
|
||||||||||||
Oil and natural gas property and equipment
|
||||||||||||||||
Proved properties
|
$
|
16,592
|
$
|
-
|
$
|
-
|
$
|
16,592
|
||||||||
Unproved properties
|
254
|
-
|
-
|
254
|
||||||||||||
Accumulated depletion and impairment
|
(7,159
|
)
|
-
|
-
|
(7,159
|
)
|
||||||||||
Oil and natural gas property and equipment, net
|
$
|
9,687
|
$
|
-
|
$
|
-
|
$
|
9,687
|
||||||||
Buildings and land
|
$
|
101
|
$
|
47
|
$
|
-
|
$
|
148
|
||||||||
Automobiles and light trucks
|
31
|
11
|
-
|
42
|
||||||||||||
Service company, pipeline and other equipment
|
38
|
616
|
6
|
660
|
||||||||||||
|
170
|
674
|
6
|
850
|
||||||||||||
Accumulated depreciation
|
(45
|
)
|
(224
|
)
|
(6
|
)
|
(275
|
)
|
||||||||
Other property and equipment, net
|
$
|
125
|
$
|
450
|
$
|
-
|
$
|
575
|
As of December 31, 2023
|
||||||||||||||||
Oil and Gas
Operations
|
Oilfield
Service
Companies
|
Pipeline
Subsidiaries
|
Total
|
|||||||||||||
Oil and natural gas property and equipment
|
||||||||||||||||
Proved properties
|
$
|
15,314
|
$
|
-
|
$
|
-
|
$
|
15,314
|
||||||||
Unproved properties
|
176
|
-
|
-
|
176
|
||||||||||||
Accumulated depletion and impairment
|
(6,573
|
)
|
- |
-
|
(6,573
|
)
|
||||||||||
Oil and natural gas property and equipment, net
|
$
|
8,917
|
$
|
-
|
$
|
-
|
$
|
8,917
|
||||||||
Buildings and land
|
$
|
97
|
$
|
46
|
$
|
-
|
$
|
143
|
||||||||
Automobiles and light trucks
|
35
|
12
|
-
|
47
|
||||||||||||
Service company, pipeline and other equipment
|
40
|
595
|
6
|
641
|
||||||||||||
172
|
653
|
6
|
831
|
|||||||||||||
Accumulated depreciation
|
(46
|
)
|
(208
|
)
|
(6
|
)
|
(260
|
)
|
||||||||
Other property and equipment, net
|
$
|
126
|
$
|
445
|
$
|
-
|
$
|
571
|
Six Months Ended June 30,
|
||||||||
2024
|
2023
|
|||||||
Depletion of proved oil and natural gas
properties
|
$
|
593
|
$
|
475
|
||||
Depreciation of other property and equipment
|
49
|
30
|
||||||
Accretion of asset retirement obligations
|
8
|
8
|
||||||
Total depletion, depreciation, amortization and accretion expense
|
$
|
650
|
$
|
513
|
Operating
|
||||
Leases
|
||||
2024 Remaining
|
$
|
9
|
||
2025
|
19
|
|||
2026
|
-
|
|||
2027
|
-
|
|||
2028
|
-
|
|||
Thereafter
|
$
|
28
|
Six Months Ended June 30,
|
||||||||
2024
|
2023
|
|||||||
Short-term lease cost(a)
|
$
|
45
|
$
|
-
|
||||
Operating lease cost(b)
|
10
|
- | ||||||
Total lease cost
|
$
|
55
|
$
|
-
|
|
Six Months Ended June 30,
|
|||||||
|
2024
|
2023
|
||||||
Investing cash flows:
|
|
|
||||||
Cash payments for operating and short-term leases (a)
|
$
|
55
|
$
|
-
|
June 30, 2024
|
December 31, 2023
|
|||||||||||||||
Carrying Value
|
Fair Value
|
Carrying Value
|
Fair Value
|
|||||||||||||
2028 Senior Notes
|
907
|
915
|
907
|
911
|
||||||||||||
Premium on 2028 Senior Notes
|
9
|
-
|
10
|
-
|
||||||||||||
Total debt
|
916
|
915
|
917
|
911
|
||||||||||||
Deferred debt costs
|
(3
|
)
|
-
|
(4
|
)
|
-
|
||||||||||
Long-term debt, net of deferred debt costs
|
913
|
915
|
913
|
911
|
2028 Senior Notes
|
||||
Outstanding amount
|
$
|
907
|
||
Interest rate
|
5.750
|
%
|
||
Maturity date
|
January 30, 2028
|
Year
|
|
2028 Senior Notes
Redemption Prices
|
|
|
2024
|
101.916
|
%
|
||
2025
|
101.437
|
%
|
||
2026
|
100.000
|
%
|
||
2027 and thereafter
|
100.000
|
%
|
2024 Remaining
|
$
|
-
|
||
2025
|
-
|
|||
2026
|
-
|
|||
2027
|
-
|
|||
2028
|
907
|
|||
Thereafter
|
- | |||
|
$
|
907
|
Six Months Ended June 30,
|
||||||||
2024
|
2023
|
|||||||
Cash payments for interest
|
$
|
(30
|
)
|
$
|
(34
|
)
|
||
Amortization of issuance premium
|
1
|
1
|
||||||
Amortization of deferred debt costs
|
(1
|
)
|
(2
|
)
|
||||
Net change in accruals
|
-
|
2
|
||||||
Total
|
(30
|
)
|
(33
|
)
|
||||
Less: interest income
|
18
|
39
|
||||||
Interest (expense) income, net
|
$
|
(12
|
)
|
$
|
6
|
Six Months Ended June 30,
|
||||||||
2024
|
2023
|
|||||||
Enterprise Crude Oil, LLC
|
16
|
%
|
15
|
%
|
||||
DK Trading & Supply, LLC
|
14
|
%
|
10
|
%
|
||||
Trafigura PTE
|
12
|
%
|
*
|
|||||
Oasis Transportation and Marketing, Inc (a related party)
|
*
|
14
|
%
|
Six Months Ended
|
||||
June 30, 2024
|
||||
ARO, beginning of period
|
$
|
260
|
||
ARO additions and dispositions, net
|
6
|
|||
Asset retirement costs incurred
|
(24
|
)
|
||
Accretion expense
|
8
|
|||
Revisions of estimates
|
22
|
|||
ARO, end of period
|
$
|
272
|
Derivative Contracts - Oil
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Total
|
Accounting
Treatment
|
|||||||||||||||
Derivatives not designated as hedging instruments
|
|||||||||||||||||||||
Oil Collars - NYMEX WTI
|
Mark-to-Market
|
||||||||||||||||||||
2024:
|
|||||||||||||||||||||
Volumes (MBbl)
|
-
|
-
|
4,416
|
3,588
|
8,004
|
||||||||||||||||
Weighted average ceiling price per Bbl
|
$
|
-
|
$
|
-
|
$
|
89.34
|
$
|
89.30
|
$
|
89.32
|
|||||||||||
Weighted average floor price per Bbl
|
$
|
-
|
$
|
-
|
$
|
62.19
|
$
|
61.54
|
$
|
61.90
|
|||||||||||
2025:
|
|||||||||||||||||||||
Volumes (MBbl)
|
1,080
|
-
|
-
|
-
|
1,080
|
||||||||||||||||
Weighted average ceiling price per Bbl
|
$
|
89.53
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
89.53
|
|||||||||||
Weighted average floor price per Bbl
|
$
|
60.00
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
60.00
|
|||||||||||
Oil Basis Swaps - NYMEX WTI Midland - Argus
|
|||||||||||||||||||||
2024:
|
|||||||||||||||||||||
Volumes (MBbl)
|
-
|
-
|
4,232
|
3,404
|
7,636
|
||||||||||||||||
Weighted average price per Bbl
|
$
|
-
|
$
|
-
|
$
|
1.21
|
$
|
1.21
|
$
|
1.21
|
|||||||||||
2025:
|
|||||||||||||||||||||
Volumes (MBbl)
|
900
|
- |
-
|
-
|
900
|
||||||||||||||||
Weighted average price per Bbl
|
$
|
1.22
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1.22
|
Derivative Contracts - Natural Gas
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Total
|
Accounting
Treatment
|
|||||||||||||||
Derivatives not designated as hedging instruments
|
|||||||||||||||||||||
Natural Gas Price Swaps - NYMEX Henry Hub
|
Mark-to-Market
|
||||||||||||||||||||
2024:
|
|||||||||||||||||||||
Volumes (MMBtu)
|
-
|
-
|
3,680
|
920
|
4,600
|
||||||||||||||||
Weighted average price per MMBtu
|
$
|
-
|
$
|
-
|
$
|
2.75
|
$
|
3.51
|
$
|
2.90
|
|||||||||||
Natural Gas Collars - NYMEX Henry Hub
|
|||||||||||||||||||||
2024:
|
|||||||||||||||||||||
Volumes (MMBtu)
|
- |
-
|
4,140
|
9,200
|
13,340
|
||||||||||||||||
Weighted average ceiling price per MMBtu
|
$
|
-
|
$
|
-
|
$
|
3.73
|
$
|
3.83
|
$
|
3.80
|
|||||||||||
Weighted average floor price per MMBtu
|
$
|
-
|
$
|
-
|
$
|
2.72
|
$
|
2.61
|
$
|
2.64
|
|||||||||||
2025:
|
|||||||||||||||||||||
Volumes (MMBtu)
|
3,600
|
-
|
-
|
-
|
3,600
|
||||||||||||||||
Weighted average ceiling price per MMBtu
|
$
|
5.35
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
5.35
|
|||||||||||
Weighted average floor price per MMBtu
|
$
|
2.94
|
$
|
-
|
$
|
-
|
$
|
- |
$
|
2.94
|
|||||||||||
Natural Gas Basis Swaps - Waha
|
|||||||||||||||||||||
2024:
|
|||||||||||||||||||||
Volumes (MMBtu)
|
-
|
-
|
6,440
|
10,120
|
16,560
|
||||||||||||||||
Weighted average price per MMBtu
|
$
|
-
|
$
|
-
|
$
|
(0.84
|
)
|
$
|
(0.80
|
)
|
$
|
(0.82
|
)
|
||||||||
2025:
|
|||||||||||||||||||||
Volumes (MMBtu)
|
2,700
|
-
|
-
|
-
|
2,700
|
||||||||||||||||
Weighted average price per MMBtu
|
$
|
(0.45
|
)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(0.45
|
)
|
Derivative Contracts - Electricity
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Total
|
Accounting
Treatment
|
|||||||||||||||
Derivatives designated as hedging instruments
|
|||||||||||||||||||||
Electricity - Electric Reliability Council of Texas ("ERCOT") - ERCOT West 345 kV Hub
|
Cash flow hedges
|
||||||||||||||||||||
2024:
|
|||||||||||||||||||||
Power Load Hedged (MWh)
|
-
|
-
|
178,848
|
154,560
|
333,408
|
||||||||||||||||
Weighted average swap price ($/MWh)
|
$
|
-
|
$
|
-
|
$
|
48.80
|
$
|
40.85
|
$
|
45.11
|
|||||||||||
2025:
|
|||||||||||||||||||||
Power Load Hedged (MWh)
|
151,200
|
131,040
|
154,580
|
132,480
|
569,300
|
||||||||||||||||
Weighted average swap price ($/MWh)
|
$
|
40.85
|
$
|
40.30
|
$
|
46.76
|
$
|
40.30
|
$
|
42.20
|
|||||||||||
2026:
|
|||||||||||||||||||||
Power Load Hedged (MWh)
|
129,580
|
-
|
-
|
- |
129,580
|
||||||||||||||||
Weighted average swap price ($/MWh)
|
$
|
40.30
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
40.30
|
|
Location of Gain (Loss)
|
Six Months Ended June 30,
|
|||||||
|
Recognized in Income on Derivative
|
2024
|
2023
|
||||||
Gain (loss) on derivative instruments, net
|
|||||||||
Oil contracts
|
Gain (loss) from derivative instruments
|
$
|
(19
|
)
|
$
|
24
|
|||
Natural gas contracts
|
Gain (loss) from derivative instruments
|
23
|
(32
|
)
|
|||||
Total gain (loss) from derivative instruments not designated as hedges
|
4
|
(8
|
)
|
||||||
Electricity contracts
|
Lease operating expense
|
(2
|
)
|
-
|
|||||
Total
|
|
$
|
2
|
$
|
(8
|
)
|
|
Location of Gain (Loss)
|
Six Months Ended June 30,
|
|||||||
|
Recognized in Income on Derivative
|
2024
|
2023
|
||||||
Cash receipts (payments) on derivative instruments, net:
|
|||||||||
Oil contracts
|
Gain (loss) from derivative instruments
|
$
|
(1
|
)
|
$
|
8
|
|||
Natural gas contracts
|
Gain (loss) from derivative instruments
|
32
|
(4
|
)
|
|||||
Total cash receipts (payments) on derivative not designated as hedges
|
31
|
4
|
|||||||
Electricity contracts
|
Lease operating expense
|
(2
|
)
|
-
|
|||||
Total
|
$
|
29
|
$
|
4
|
|
Change in Value Recognized in Other
Comprehensive Income (Loss) on
Derivatives
|
|||||||
Six Months Ended June 30,
|
||||||||
Derivative in Cash Flow Hedging Relationships
|
2024
|
2023
|
||||||
Commodity derivatives - Electricity, net
|
$
|
7
|
$
|
4
|
||||
Total
|
$
|
7
|
$
|
4
|
As of June 30, 2024
|
||||||||||||||||
Current
|
Noncurrent
|
|||||||||||||||
Assets
|
Liabilities
|
Assets
|
Liabilities
|
|||||||||||||
Crude oil contracts
|
$
|
5
|
$
|
9
|
$
|
-
|
$
|
-
|
||||||||
Natural gas contracts
|
13
|
4
|
-
|
-
|
||||||||||||
Electricity price swaps
|
12
|
-
|
8
|
-
|
||||||||||||
Total gross amounts presented in the balance sheet
|
$
|
30
|
$
|
13
|
$
|
8
|
$
|
-
|
||||||||
Less: gross amount offset in the balance sheet
|
-
|
-
|
-
|
-
|
||||||||||||
Net amounts
|
$
|
30
|
$
|
13
|
$
|
8
|
$
|
- |
As of December 31, 2023
|
||||||||||||||||
Current
|
Noncurrent
|
|||||||||||||||
Assets
|
Liabilities
|
Assets
|
Liabilities
|
|||||||||||||
Crude oil contracts
|
$
|
20
|
$
|
6
|
$
|
-
|
$
|
-
|
||||||||
Natural gas contracts
|
20
|
2
|
-
|
-
|
||||||||||||
Electricity price swaps
|
6
|
1
|
9
|
1
|
||||||||||||
Total gross amounts presented in the balance sheet
|
$
|
46
|
$
|
9
|
$
|
9
|
$
|
1
|
||||||||
Less: gross amount offset in the balance sheet
|
-
|
-
|
-
|
-
|
||||||||||||
Net amounts
|
$
|
46
|
$
|
9
|
$
|
9
|
$
|
1
|
Cash flow hedges
|
Commodity Derivatives
|
|||
Accumulated other comprehensive income, December 31, 2023
|
$
|
13
|
||
Other comprehensive income for period, before reclassifications
|
5
|
|||
Reclassification of losses (gains) to net income during period
|
2
|
|||
Accumulated Other Comprehensive Income, June 30, 2024
|
$
|
20
|
Payments Due by Period
|
||||||||||||||||||||
Contractual obligations
|
Total
|
1 Year or Less
|
2-3 Years
|
4-5 Years
|
More than 5
Years
|
|||||||||||||||
Long-term debt - principal (1)
|
$
|
907
|
$
|
-
|
$
|
- |
$
|
907
|
$
|
-
|
||||||||||
Long-term debt - interest (1)
|
190
|
56
|
104
|
30
|
-
|
|||||||||||||||
Asset retirement obligations (2)
|
272
|
15
|
13
|
8
|
236
|
|||||||||||||||
Derivative liabilities
|
13
|
13
|
-
|
-
|
-
|
|||||||||||||||
Transportation Service Agreement (3)
|
28
|
11
|
17
|
-
|
-
|
|||||||||||||||
Purchase commitments (4)
|
106
|
106
|
-
|
-
|
-
|
|||||||||||||||
Drilling and completion commitments (5)
|
28
|
23
|
5
|
-
|
-
|
|||||||||||||||
Compressor commitments (6)
|
128
|
62
|
62
|
4
|
-
|
|||||||||||||||
Other commitments (7)
|
1
|
1
|
-
|
-
|
-
|
|||||||||||||||
|
$
|
1,673
|
$
|
287
|
$
|
201
|
$
|
949
|
$
|
236
|
(1) |
The interest and commitment payments presented above includes the accrued interest payable on our long-term debt as of June 30, 2024 as well as future payments calculated using the long-term debt's fixed rates, stated maturity dates and principal amounts outstanding as of June 30, 2024. See Note E - Debt to the consolidated financial statements for additional information regarding debt.
|
(2) |
Amounts represent costs related to expected oil and natural gas property abandonments related to producing properties by period, net of any future accretion.
|
(3) |
The Company has a firm transportation agreement for dedicated capacity on a pipeline that connects with regional gathering systems and transports oil to the Gulf Coast. We have a long-term 21,000 Bbl per day average commitment.
|
(4) |
The Company entered into purchase agreements for oil country tubular goods ("OCTG") and materials that are expected to be used for the development of the Company's oil and natural gas properties. These agreements are at fixed prices and quantities of such materials during 2024.
|
(5) |
The Company, as of June 30, 2024, has entered into drilling rig and completion contracts with various third-party parties in the ordinary course of business to ensure rig and frac crew availability to complete the Company's drilling and completions projects. As a result, certain of the Company's rig commitments being long-term, the Company has recognized a right-of-use assets and liabilities under ASC 842. See Note D - Oil and Natural Gas Properties, Other Property and Equipment and Lease Information for additional information related to the leases. In addition, certain of these commitments are not recorded in the Company's consolidated balance sheets as a result of contracts having an initial term of 12-months or less. Future minimum commitments as of June 30, 2024 total approximately $28 million.
|
(6) |
The Company has entered into commitments for compressor rentals in the normal course of business for operating oil and natural gas properties. As a result, the Company's compressor rental commitments total $128 million. The Company's compressor rentals are subject to long-term contracts which are subject to substantive substitution rights and thus not considered a lease under ASC 842.
|
(7) |
Other commitments related to a two-year lease of office space in Midland, Texas.
|
Total
|
Fair value measurement using
|
|||||||||||||||
carrying value
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Derivatives:
|
||||||||||||||||
Crude oil contract assets
|
$
|
5
|
$
|
-
|
$
|
5
|
$
|
-
|
||||||||
Crude oil contract liabilities
|
$
|
9
|
$
|
-
|
$
|
9
|
$
|
-
|
||||||||
Natural gas contract assets
|
$
|
13
|
$
|
-
|
$
|
13
|
$
|
-
|
||||||||
Natural gas contract liabilities
|
$
|
4
|
$
|
-
|
$
|
4
|
$
|
-
|
||||||||
Electricity price swap assets
|
$
|
20
|
$
|
-
|
$
|
20
|
$
|
-
|
||||||||
Rabbi Trust:
|
||||||||||||||||
Marketable securities held in Trust(1)
|
$
|
23
|
$
|
23
|
$
|
-
|
$
|
-
|
Total
|
Fair value measurement using
|
|||||||||||||||
carrying value
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Derivatives:
|
||||||||||||||||
Crude oil contract assets
|
$
|
20
|
$
|
-
|
$
|
20
|
$
|
-
|
||||||||
Crude oil contract liabilities
|
$
|
6
|
$
|
-
|
$
|
6
|
$
|
-
|
||||||||
Natural gas contract assets
|
$
|
20
|
$
|
-
|
$
|
20
|
$
|
-
|
||||||||
Natural gas contract liabilities
|
$
|
2
|
$
|
-
|
$
|
2
|
$
|
-
|
||||||||
Electricity price swap assets
|
$
|
15
|
$
|
-
|
$
|
15
|
$
|
-
|
||||||||
Electricity price swap liabilities
|
$
|
2
|
$
|
-
|
$
|
2
|
$
|
-
|
||||||||
Rabbi Trust:
|
||||||||||||||||
Marketable securities held in trust (1)
|
$
|
19
|
$
|
19
|
$
|
-
|
$
|
-
|
|
Six Months Ended June 30,
|
|||||||
|
2024
|
2023
|
||||||
Deferred taxes - C-Corporation conversion effect
|
$
|
1,630
|
$
|
-
|
||||
Income tax provision
|
422
|
13
|
||||||
Provision for income taxes
|
$
|
2,052
|
$
|
13
|