|
8. DERIVATIVES AND FAIR VALUE
The Company uses derivative financial instruments from time to time to achieve a more predictable cash flow from crude oil production by reducing the Company’s exposure to price fluctuations. See the table below for the list of outstanding contracts as of September 30, 2023:
| Settlement Period |
Type of Contract |
Index |
|
Average Monthly Volumes |
|
|
Weighted Average Put Price |
|
|
Weighted Average Call Price |
|
| |
|
|
|
(Bbls) |
|
|
(per Bbl) |
|
|
(per Bbl) |
|
| October 2023 - December 2023 |
Collars |
Dated Brent |
|
|
85,000 |
|
|
$ |
65.00 |
|
|
$ |
90.00 |
|
| January 2024 - March 2024 |
Collars |
Dated Brent |
|
|
85,000 |
|
|
$ |
65.00 |
|
|
$ |
97.00 |
|
| April 2024 - June 2024 |
Collars |
Dated Brent |
|
|
65,000 |
|
|
$ |
65.00 |
|
|
$ |
100.00 |
|
The following table sets forth the loss on derivative instruments on the Company’s unaudited condensed consolidated statements of operations and comprehensive income:
| |
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
| Derivative Item |
|
Statements of Operations Line |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
| |
|
|
|
(in thousands) |
|
|
(in thousands) |
|
| Commodity derivatives |
|
Cash settlements paid on matured derivative contracts, net |
|
$ |
1 |
|
|
$ |
(9,124 |
) |
|
$ |
(62 |
) |
|
$ |
(42,683 |
) |
| |
|
Unrealized gain (loss) |
|
|
(2,321 |
) |
|
|
12,902 |
|
|
|
(2,206 |
) |
|
|
5,161 |
|
| |
|
Derivative instruments gain (loss), net |
|
$ |
(2,320 |
) |
|
$ |
3,778 |
|
|
$ |
(2,268 |
) |
|
$ |
(37,522 |
) |
|