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What changed in Amplify Energy Corp.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Amplify Energy Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+489 added−385 removedSource: 10-K (2025-03-05) vs 10-K (2024-03-07)

Top changes in Amplify Energy Corp.'s 2024 10-K

489 paragraphs added · 385 removed · 283 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

125 edited+47 added−40 removed186 unchanged
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations.” 17 Table of Contents The following tables summarize our average net production, average unhedged sales prices by product and average lease operating cost expense per Boe by geographic region for the years ended December 31, 2023 and 2022, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ Oil ​ NGLs ​ Natural Gas ​ Total ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ Average ​ Lease ​ ​ Production ​ Sales ​ Production ​ Sales ​ Production ​ Sales ​ Production ​ Sales ​ Operating ​ ​ Volumes ​ Price ​ Volumes ​ Price ​ Volumes ​ Price ​ Volumes ​ Price ​ Expense ​ ​ (MBbls) ​ ($/Bbl) ​ (MBbls) ​ ($/Bbl) ​ (MMcf) ​ ($/Mcf) ​ (MBoe) ​ ($/Boe) ​ ($/Boe) Oklahoma 426 $ 76.14 602 $ 21.48 6,706 $ 2.95 2,145 $ 30.36 $ 9.25 Bairoil 1,199 ​ 72.15 — ​ — — ​ — 1,199 ​ 72.15 ​ 41.34 Beta (1) 679 ​ 75.31 — ​ — — ​ — 679 ​ 75.31 ​ 57.02 East Texas/ North Louisiana 157 ​ 75.05 681 ​ 23.08 13,359 ​ 2.46 3,065 ​ 19.67 ​ 8.12 Eagle Ford 312 ​ 76.29 40 ​ 19.47 232 ​ 2.52 391 ​ 64.44 ​ 16.82 Total 2,773 ​ $ 74.17 1,323 ​ $ 22.24 20,297 ​ $ 2.62 7,479 ​ $ 38.54 ​ $ 18.66 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average net production (MBoe/d) ​ ​ ​ 20.5 ​ ​ (1) The Beta field restarted production in April 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ Oil ​ NGLs ​ Natural Gas ​ Total ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ Average ​ Lease ​ ​ Production ​ Sales ​ Production ​ Sales ​ Production ​ Sales ​ Production ​ Sales ​ Operating ​ ​ Volumes ​ Price ​ Volumes ​ Price ​ Volumes ​ Price ​ Volumes ​ Price ​ Expense ​ (MBbls) ($/Bbl) (MBbls) ($/Bbl) (MMcf) ($/Mcf) (MBoe) ($/Boe) ($/Boe) Oklahoma 488 ​ $ 95.10 660 ​ $ 31.57 7,343 ​ $ 7.00 2,371 ​ $ 50.00 ​ $ 9.11 Bairoil 1,325 ​ 88.52 — ​ — — ​ — 1,325 ​ ​ 88.52 ​ ​ 39.17 Beta (1) 18 ​ 77.55 — ​ — — ​ — 18 ​ 77.55 ​ 1,524.98 East Texas/ North Louisiana 175 ​ 93.55 680 ​ 36.61 15,367 ​ 6.16 3,416 ​ 39.78 ​ 6.97 Eagle Ford 321 ​ 96.87 49 ​ 33.69 283 ​ 6.36 418 ​ 82.82 ​ 15.97 Total 2,327 ​ $ 91.34 1,389 ​ $ 34.11 22,993 ​ $ 6.43 7,548 ​ $ 54.02 ​ $ 17.45 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average net production (MBoe/d) ​ ​ ​ ​ 20.7 ​ ​ (1) On October 2, 2021, the Beta field was shut-in after the Incident and therefore the table above reflects minimal activity.
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations.” The following tables summarize our average net production, average unhedged sales prices by product and average lease operating cost expense per Boe by geographic region for the years ended December 31, 2024 and 2023, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2024 ​ ​ Oil ​ NGLs ​ Natural Gas ​ Total ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ Average ​ Lease ​ ​ Production ​ Sales ​ Production ​ Sales ​ Production ​ Sales ​ Production ​ Sales ​ Operating ​ ​ Volumes ​ Price ​ Volumes ​ Price ​ Volumes ​ Price ​ Volumes ​ Price ​ Expense ​ ​ (MBbls) ​ ($/Bbl) ​ (MBbls) ​ ($/Bbl) ​ (MMcf) ​ ($/Mcf) ​ (MBoe) ​ ($/Boe) ​ ($/Boe) Oklahoma 347 $ 75.05 525 $ 23.07 5,995 $ 2.06 1,871 $ 26.98 $ 8.53 Bairoil 1,181 ​ 70.01 — ​ — — ​ — 1,181 ​ 70.01 ​ 44.70 Beta 1,170 ​ 72.51 — ​ — — ​ — 1,170 ​ 72.51 ​ 38.94 East Texas/ North Louisiana 143 ​ 73.38 717 ​ 19.48 10,627 ​ 2.17 2,631 ​ 18.07 ​ 8.59 Eagle Ford 219 ​ 74.50 36 ​ 19.79 214 ​ 2.01 291 ​ 60.00 ​ 20.72 Total 3,060 ​ $ 72.01 1,278 ​ $ 20.96 16,836 ​ $ 2.13 7,144 ​ $ 39.61 ​ $ 20.01 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average net production (MBoe/d) ​ ​ ​ 19.5 ​ ​ ​ 19 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ Oil ​ NGLs ​ Natural Gas ​ Total ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ Average ​ Lease ​ ​ Production ​ Sales ​ Production ​ Sales ​ Production ​ Sales ​ Production ​ Sales ​ Operating ​ ​ Volumes ​ Price ​ Volumes ​ Price ​ Volumes ​ Price ​ Volumes ​ Price ​ Expense ​ (MBbls) ($/Bbl) (MBbls) ($/Bbl) (MMcf) ($/Mcf) (MBoe) ($/Boe) ($/Boe) Oklahoma 426 ​ $ 76.14 602 ​ $ 21.48 6,706 ​ $ 2.95 2,145 ​ $ 30.36 ​ $ 9.25 Bairoil 1,199 ​ 72.15 — ​ — — ​ — 1,199 ​ ​ 72.15 ​ ​ 41.34 Beta (1) 679 ​ 75.31 — ​ — — ​ — 679 ​ 75.31 ​ 57.02 East Texas/ North Louisiana 157 ​ 75.05 681 ​ 23.08 13,359 ​ 2.46 3,065 ​ 19.67 ​ 8.12 Eagle Ford 312 ​ 76.29 40 ​ 19.47 232 ​ 2.52 391 ​ 64.44 ​ 16.82 Total 2,773 ​ $ 74.17 1,323 ​ $ 22.24 20,297 ​ $ 2.62 7,479 ​ $ 38.54 ​ $ 18.66 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average net production (MBoe/d) ​ ​ ​ ​ 20.5 ​ ​ (1) The Beta field restarted production in April 2023.
Numerous governmental authorities, such as the U.S. Environmental Protection Agency (“EPA”) and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them, often requiring difficult and costly compliance or corrective actions.
Numerous governmental authorities, such as the U.S. Environmental Protection Agency (the “EPA”) and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them, often requiring difficult and costly compliance or corrective actions.
In June 2015, the EPA and the Corps issued a rule to revise the definition of “waters of the United States” (“WOTUS”) for all Clean Water Act programs, which never took effect before being replaced by the Navigable Waters Protection Rule (“NWPR”) in April 2020. The NWPR was vacated by two separate federal district courts in late 2021.
In June 2015, the EPA and the Corps issued a rule to revise the definition of “waters of the United States” (“WOTUS”) for all Clean Water Act programs, which never took effect before being replaced by the Navigable Waters Protection Rule (the “NWPR”) in April 2020. The NWPR was vacated by two separate federal district courts in late 2021.
The Oklahoma Geological Survey attributed an increase in seismic activity in Oklahoma to saltwater disposal wells in the Arbuckle formation and, the Oklahoma Corporation Commission (“OCC”), whose Oil and Gas Conservation Division regulates oil and gas operations in Oklahoma, issued regulations targeting saltwater disposal activities in certain areas of interest within the Arbuckle formation.
The Oklahoma Geological Survey attributed an increase in seismic activity in Oklahoma to saltwater disposal wells in the Arbuckle formation and, the Oklahoma Corporation Commission (the “OCC”), whose Oil and Gas Conservation Division regulates oil and gas operations in Oklahoma, issued regulations targeting saltwater disposal activities in certain areas of interest within the Arbuckle formation.
Notably, EPA updated the applicability date for Subparts OOOOb and OOOOc to December 6, 2022, meaning that sources constructed prior to that date will be considered existing sources with later compliance dates under state plans.
Notably, the EPA updated the applicability date for Subparts OOOOb and OOOOc to December 6, 2022, meaning that sources constructed prior to that date will be considered existing sources with later compliance dates under state plans.
Our sales of oil and natural gas are also subject to anti-manipulation and anti-disruptive practices authority under (i) the Commodity Exchange Act (“CEA”), as amended by the Dodd-Frank Act, and regulations promulgated thereunder by the CFTC, and (ii) the Energy Independence and Security Act of 2007 (“EISA”) and regulations promulgated thereunder by the FTC.
Our sales of oil and natural gas are also subject to anti-manipulation and anti-disruptive practices authority under (i) the Commodity Exchange Act (the “CEA”), as amended by the Dodd-Frank Act, and regulations promulgated thereunder by the CFTC, and (ii) the Energy Independence and Security Act of 2007 (the “EISA”) and regulations promulgated thereunder by the FTC.
We believe accident prevention and efficiency in production run hand-in-hand. Our internal Stop Work Authority (“SWA”) empowers employees to pause operations so that an observed potential hazard can be eliminated or mitigated. We are committed to maintaining a safe and healthy work environment by complying with state and federal regulations concerning the health and safety of our employees.
We believe accident prevention and efficiency in production run hand-in-hand. Our internal Stop Work Authority empowers employees to pause operations so that an observed potential hazard can be eliminated or mitigated. We are committed to maintaining a safe and healthy work environment by complying with state and federal regulations concerning the health and safety of our employees.
It is possible that our oil and natural gas operations may require us to manage naturally occurring radioactive materials (“NORM”). NORM is present in varying concentrations in sub-surface formations, including hydrocarbon reservoirs, and may become concentrated in scale, film and sludge in equipment that comes into contact with crude oil and natural gas production and processing streams.
It is possible that our oil and natural gas operations may require us to manage naturally occurring radioactive materials (“NORM”). NORM are present in varying concentrations in sub-surface formations, including hydrocarbon reservoirs, and may become concentrated in scale, film and sludge in equipment that comes into contact with crude oil and natural gas production and processing streams.
Anti-Market Manipulation Laws and Regulations The FERC, with respect to the purchase or sale of natural gas or the purchase or sale of transmission or transportation services subject to FERC jurisdiction and the Federal Trade Commission with respect to petroleum and petroleum products, operating under various statutes, have each adopted anti-market manipulation regulations, which prohibit, among other things, fraud and price manipulation in the respective markets.
Anti-Market Manipulation Laws and Regulations The FERC, with respect to the purchase or sale of natural gas or the purchase or sale of transmission or transportation services subject to FERC jurisdiction and the Federal Trade Commission (the “FTC”) with respect to petroleum and petroleum products, operating under various statutes, have each adopted anti-market manipulation regulations, which prohibit, among other things, fraud and price manipulation in the respective markets.
PV-10 differs from standardize measure because standardized measure includes the effects of future income taxes on future net cash flows. Standardized measure is prescribed by the SEC as an industry standard asset value measure to compare reserves with consistent pricing costs and discount assumptions.
PV-10 differs from standardized measure because standardized measure includes the effects of future income taxes on future net cash flows. Standardized measure is prescribed by the SEC as an industry standard asset value measure to compare reserves with consistent pricing costs and discount assumptions.
In July 2020, the White House’s Council on Environmental Quality published a final rule to amend the NEPA implementing regulations intended to streamline the environmental review process, including shortening the time for review as well as eliminating the requirement to evaluate cumulative impacts.
In July 2020, the White House’s Council on Environmental Quality (“CEQ”) published a final rule to amend the NEPA implementing regulations intended to streamline the environmental review process, including shortening the time for review as well as eliminating the requirement to evaluate cumulative impacts.
Offshore Operations Our oil and gas operations associated with our Beta properties are conducted on offshore leases in federal waters and those operations are regulated by agencies such as the BOEM and the BSEE, which have broad authority to regulate our oil and gas operations associated with our Beta properties.
Offshore Operations Our oil and gas operations associated with our Beta properties are conducted on offshore leases in federal waters, and those operations are regulated by agencies such as BOEM and BSEE, which have broad authority to regulate our oil and gas operations associated with our Beta properties.
In addition, the long-term trend in environmental regulation has been to place more restrictions and limitations on activities that may affect the environment and thus, our costs of compliance may increase if existing laws and regulations are revised or reinterpreted, or if new laws and regulations become applicable to our operations. 22 Table of Contents Under certain environmental laws that impose strict as well as joint and several liability, we may be required to remediate contaminated properties currently or formerly owned or operated by us or facilities of third parties that received waste generated by our operations regardless of whether such contamination resulted from the conduct of others or from our own actions that were in compliance with all applicable laws at the time those actions were taken.
In addition, the long-term trend in environmental regulation has been to place more restrictions and limitations on activities that may affect the environment and thus, our costs of compliance may increase if existing laws and regulations are revised or reinterpreted, or if new laws and regulations become applicable to our operations. 24 Table of Contents Under certain environmental laws that impose strict as well as joint and several liability, we may be required to remediate contaminated properties currently or formerly owned or operated by us or facilities of third parties that received waste generated by our operations regardless of whether such contamination resulted from the conduct of others or from our own actions that were in compliance with all applicable laws at the time such actions were taken.
For example, the EPA issued a report examining the potential for hydraulic fracturing activities to impact drinking water resources, finding that, under some circumstances, the use of water in hydraulic fracturing activities can impact drinking water resources.
For example, in 2016, the EPA issued a report examining the potential for hydraulic fracturing activities to impact drinking water resources, finding that, under some circumstances, the use of water in hydraulic fracturing activities can impact drinking water resources.
We continue to monitor the impact of the actions of the Organization of the Petroleum Exporting Countries and other large producing nations; the Russia-Ukraine conflict; conflicts in the Middle East; global inventories of oil and natural gas and the uncertainty associated with recovering oil demand; inflation and future monetary policy; and governmental policies aimed at transitioning towards lower carbon energy.
Industry Trends We continue to monitor the impact of the actions of the Organization of the Petroleum Exporting Countries and other large producing nations; the Russia-Ukraine conflict; conflicts in the Middle East; global inventories of oil and natural gas and the uncertainty associated with recovering oil demand; inflation and future monetary policy; and governmental policies aimed at transitioning towards lower carbon energy.
To that end, it is our policy to prohibit discrimination and harassment of any type and afford equal employment opportunities to employees and applicants without regard to race, color, religion, sex, national origin, age, disability, genetic information, veteran status, or any other basis protected by federal, state or local law.
It is our policy to prohibit discrimination and harassment of any type and afford equal employment opportunities to employees and applicants without regard to race, color, religion, sex, national origin, age, disability, genetic information, veteran status, or any other basis protected by federal, state or local law.
We maintain all required discharge permits necessary to conduct our operations and we believe we are in substantial compliance with their terms. 25 Table of Contents In addition, in some instances, the operation of underground injection wells for the disposal of wastewater has been alleged to cause earthquakes.
We maintain all required discharge permits necessary to conduct our operations and we believe we are in substantial compliance with their terms. 27 Table of Contents In addition, in some instances, the operation of underground injection wells for the disposal of wastewater has been alleged to cause earthquakes.
Texas has also imposed requirements for drilling, putting pipe down and cementing wells, and testing and reporting requirements. 26 Table of Contents Certain governmental reviews have been conducted that focus on environmental aspects of hydraulic fracturing practices, which could lead to increased regulation.
Texas has also imposed requirements for drilling, putting pipe down and cementing wells, and testing and reporting requirements. 28 Table of Contents Certain governmental reviews have been conducted that focus on environmental aspects of hydraulic fracturing practices, which could lead to increased regulation.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Commodity Derivative Contracts.” 16 Table of Contents (3) PV-10 is a non-GAAP financial measure and represents the year end present value of estimated future cash inflows from proved oil and natural gas reserves, less future development and operating costs, discounted at 10% per annum to reflect the timing of future cash flows and using SEC prescribed pricing assumptions for the period.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Commodity Derivative Contracts.” (3) PV-10 is a non-GAAP financial measure and represents the year end present value of estimated future cash inflows from proved oil and natural gas reserves, less future development and operating costs, discounted at 10% per annum to reflect the timing of future cash flows and using SEC prescribed pricing assumptions for the period.
Derivatives Regulation Comprehensive financial reform legislation was signed into law by the President on July 21, 2010 (“Dodd-Frank Act”). This legislation called for the Commodities Futures Trading Commission (“CFTC”) to regulate certain markets for derivative products, including over-the-counter derivatives.
Derivatives Regulation Comprehensive financial reform legislation was signed into law by former President Obama on July 21, 2010 (the “Dodd-Frank Act”). This legislation called for the Commodities Futures Trading Commission (the “CFTC”) to regulate certain markets for derivative products, including over-the-counter derivatives.
Operations General As of December 31, 2023, the Company is the operator of record of properties containing 92% of our total estimated proved reserves. We design and manage the development, recompletion and/or workover operations, and supervise other operation and maintenance activities for all of the wells we operate.
Operations General As of December 31, 2024, the Company is the operator of record of properties containing 92% of our total estimated proved reserves. We design and manage the development, recompletion and/or workover operations, and supervise other operation and maintenance activities for all of the wells we operate.
Department of Transportation, U. S. Army Corps of Engineers and the South Coast Air Quality Management District. Hazardous Substances and Waste Handling Our operations are subject to environmental laws and regulations relating to the management and release of hazardous substances, solid and hazardous wastes and petroleum hydrocarbons.
Coast Guard, the EPA, U.S. Department of Transportation, U. S. Army Corps of Engineers and the South Coast Air Quality Management District. Hazardous Substances and Waste Handling Our operations are subject to environmental laws and regulations relating to the management and release of hazardous substances, solid and hazardous wastes and petroleum hydrocarbons.
Most states, and some counties and municipalities, in which we operate also regulate one or more of the following: 31 Table of Contents ● the location of wells; ● the method of drilling and casing wells; ● the surface use and restoration of properties upon which wells are drilled; ● the plugging and abandoning of wells; ● transportation of materials and equipment to and from our well sites and facilities; ● transportation and disposal of produced fluids and natural gas; and ● notice to surface owners and other third parties.
Most states, and some counties and municipalities, in which we operate also regulate one or more of the following: ● the location of wells; ● the method of drilling and casing wells; ● the surface use and restoration of properties upon which wells are drilled; ● the plugging and abandoning of wells; ● transportation of materials and equipment to and from our well sites and facilities; ● transportation and disposal of produced fluids and natural gas; and ● notice to surface owners and other third parties.
At the state level, California enacted legislation in October 2023 that will ultimately require certain companies that do business in California and exceed specified financial thresholds to publicly disclose their Scopes 1, 2, and 3 GHG emissions, with third party assurance of such data, and issue public reports on climate-related financial risk and related mitigation measures.
At the state level, California enacted legislation in October 2023, further amended in 2024, that will ultimately require certain companies that do business in California and exceed specified financial thresholds to publicly disclose their Scopes 1, 2, and 3 GHG emissions, with third party assurance of such data, and issue public reports on climate-related financial risk and related mitigation measures.
The Russia-Ukraine conflict and conflicts in the Middle East continue to evolve, and the extent to which these events may impact our business, results of operations, financial condition and cash flows will depend on future developments, which are highly uncertain and cannot be predicted with confidence. 13 Table of Contents Properties We engaged Cawley, Gillespie and Associates, Inc.
The Russia-Ukraine conflict and conflicts in the Middle East continue to evolve, and the extent to which these events may impact our business, results of operations, financial condition and cash flows will depend on future developments, which are highly uncertain and cannot be predicted with confidence. Properties We engaged Cawley, Gillespie and Associates, Inc.
For example, any GHG regulation could increase our costs of compliance by potentially delaying the receipt of permits and other regulatory approvals; requiring us to monitor emissions, install additional equipment or modify facilities to reduce GHG and other emissions; purchase emission credits; and utilize electric driven compression at facilities to obtain regulatory permits and approvals in a timely manner.
For example, any GHG regulation could increase our costs of compliance by requiring enhanced disclosure obligations, potentially delaying the receipt of permits and other regulatory approvals; requiring us to monitor emissions, install additional equipment or modify facilities to reduce GHG and other emissions; purchase emission credits; and utilize electric driven compression at facilities to obtain regulatory permits and approvals in a timely manner.
A majority of those agreements have terms that renew on a month-to-month basis until either party gives advance written notice of termination. If we were to lose any one of our customers, the loss could temporarily delay production and sale of a portion of our oil and natural gas in the related producing region.
A majority of those agreements have terms that renew on a month-to-month basis until either party gives advance written notice of termination. 21 Table of Contents If we were to lose any one of our customers, the loss could temporarily delay production and sale of a portion of our oil and natural gas in the related producing region.
The BLM has previously issued a rule that would restrict hydraulic fracturing on federal and Indian lands, but the BLM rescinded that rule in December 2017, overruling the objections of several environmental groups and states that challenged rescission of the rule.
The BLM had previously issued a rule that would restrict hydraulic fracturing on federal and Indian lands, but the BLM rescinded that rule in December 2017, overruling the objections of several environmental groups and states that challenged rescission of the rule.
New facilities may be required to obtain permits before work can begin, and modified and existing facilities may be required to obtain additional permits. 27 Table of Contents In November 2021, the EPA issued a proposed rule intended to establish standards for methane and volatile organic compounds (VOCs) from new and modified oil and natural gas production and natural gas processing and transmission facilities.
New facilities may be required to obtain permits before work can begin, and modified and existing facilities may be required to obtain additional permits. 29 Table of Contents In November 2021, the EPA issued a proposed rule intended to establish standards for methane and volatile organic compounds, or VOCs, from new and modified oil and natural gas production and natural gas processing and transmission facilities.
As a result, the final form and timing of the implementation of the new regulatory regime affecting commodity derivatives remains uncertain. 33 Table of Contents In particular, on October 18, 2011, the CFTC adopted final rules under the Dodd-Frank Act establishing position limits for certain energy commodity futures and options contracts and economically equivalent swaps, futures and options.
As a result, the final form and timing of the implementation of the new regulatory regime affecting commodity derivatives remains uncertain. In particular, on October 18, 2011, the CFTC adopted final rules under the Dodd-Frank Act establishing position limits for certain energy commodity futures and options contracts and economically equivalent swaps, futures and options.
The final rule also includes exemptions from position limits for bona fide hedging activities. The Dodd-Frank Act and new, related regulations may prompt counterparties to our derivative instruments to spin off some of their derivatives activities to separate entities, which may not be as creditworthy as the current counterparties.
The final rule also includes exemptions from position limits for bona fide hedging activities. 35 Table of Contents The Dodd-Frank Act and new, related regulations may prompt counterparties to our derivative instruments to spin off some of their derivatives activities to separate entities, which may not be as creditworthy as the current counterparties.
The estimates of our proved reserves presented in the CG&A reserve report were overseen by Todd Brooker. Mr. Brooker is the President of CG&A and has been an employee of CG&A since 1992. His responsibilities include reserve and economic evaluations, fair market valuations, field studies, pipeline resource studies and acquisition/divestiture analysis.
The estimates of our proved reserves presented in the CG&A reserve report were overseen by Todd Brooker. Mr. Brooker became the President of CG&A in 2017 and has been an employee of CG&A since 1992. His responsibilities include reserve and economic evaluations, fair market valuations, field studies, pipeline resource studies and acquisition/divestiture analysis.
In addition, there is substantial competition for capital available for investment in the oil and natural gas industry and many of our competitors have access to capital at a lower cost than that available to us. Seasonal Nature of Business The price we receive for our natural gas production is impacted by seasonal fluctuations in demand for natural gas.
In addition, there is substantial competition for capital available for investment in the oil and natural gas industry and many of our competitors have access to capital at a lower cost than that available to us. 22 Table of Contents Seasonal Nature of Business The price we receive for our natural gas production is impacted by seasonal fluctuations in demand for natural gas.
Certain reporting requirements arising from the new PHMSA rule took effect in 2022, with additional requirements taking effect later in 2023. Moreover, effective April 2017, the PHMSA adopted new rules increasing the maximum administrative civil penalties for violation of the pipeline safety laws and regulations.
Certain reporting requirements arising from the new PHMSA rule took effect in 2022, with additional requirements taking effect later in 2023. 34 Table of Contents Moreover, effective April 2017, the PHMSA adopted new rules increasing the maximum administrative civil penalties for violation of the pipeline safety laws and regulations.
In February 2021, the current administration announced reentry of the U.S. into the Paris Agreement along with a new “nationally determined contribution” for U.S. GHG emissions that would achieve emissions reductions of at least 50% relative to 2005 levels by 2030.
In February 2021, the prior Biden Administration announced reentry of the U.S. into the Paris Agreement along with a new “nationally determined contribution” for U.S. GHG emissions that would achieve emissions reductions of at least 50% relative to 2005 levels by 2030.
The Outer Continental Shelf Lands Act requires that all pipelines operating on or across the OCS provide open access, non-discriminatory transportation service. BOEM/BSEE has established formal and informal complaint procedures for shippers that believe they have been denied open and non-discriminatory access to transportation on the OCS. 32 Table of Contents The U.S.
The Outer Continental Shelf Lands Act requires that all pipelines operating on or across the OCS provide open access, non-discriminatory transportation service. BOEM/BSEE has established formal and informal complaint procedures for shippers that believe they have been denied open and non-discriminatory access to transportation on the OCS. The U.S.
Some states have enacted regulations governing the handling, treatment, storage and disposal of NORM. Administrative, civil and criminal penalties can be imposed for failure to comply with hazardous substance and waste handling requirements.
Some states have enacted regulations governing the handling, treatment, storage and disposal of NORM. 26 Table of Contents Administrative, civil and criminal penalties can be imposed for failure to comply with hazardous substance and waste handling requirements.
We recognize that a diverse workforce provides the opportunity to obtain unique perspectives, experiences, ideas, and solutions to help our business succeed.
We believe that a diverse workforce provides the opportunity to obtain unique perspectives, experiences, ideas, and solutions to help our business succeed.
In September 2023, EPA and the Corps published a direct-to-final rule redefining WOTUS to amend the January 2023 rule and align with the decision in Sackett.
In September 2023, the EPA and the Corps published a direct-to-final rule redefining WOTUS to align with the decision in Sackett.
We may, however, from time to time, hedge more or less than this approximate amount. 20 Table of Contents Periodically, we enter into interest rate swaps to mitigate exposure to market rate fluctuations by converting variable interest rates (such as those in our Revolving Credit Facility) to fixed interest rates.
We may, however, from time to time, hedge more or less than this approximate amount. Periodically, we enter into interest rate swaps to mitigate exposure to market rate fluctuations by converting variable interest rates (such as those in our Revolving Credit Facility) to fixed interest rates.
(“CG&A”), our independent reserve engineers, to prepare our reserves estimates for all of our proved reserves at December 31, 2023.
(“CG&A”), our independent reserve engineers, to prepare our reserves estimates for all of our proved reserves at December 31, 2024.
Our employees are able to attend training seminars and off-site workshops or to join professional associations that will enable them to remain up-to-date on the latest changes and best practices in their respective fields. 35 Table of Contents Diversity and Inclusion We are committed to providing a diverse and inclusive workplace and career development opportunities to attract and retain talented employees.
Our employees are able to attend training seminars and off-site workshops or to join professional associations that will enable them to remain up to date on the latest changes and best practices in their respective fields. Diversity and Inclusion We are committed to supporting a diverse and inclusive workplace and career development opportunities to attract and retain talented employees.
In July 2023, legislation was introduced in Congress that, if passed, would give the EPA the authority to regulate hydraulic fracturing processes across the U.S. and require U.S. fracturing companies to publicly disclose the chemicals used in such process, but that legislation did not pass out of committee.
In July 2023, legislation was introduced in Congress that would have given the EPA the authority to regulate hydraulic fracturing processes across the U.S. and require U.S. fracturing companies to publicly disclose the chemicals used in such process, but that legislation did not pass out of committee.
Congress or state legislative bodies and regulatory agencies may consider additional proposals or proceedings that might affect the gas or oil industries. We cannot predict when or if these proposals will become effective or any effect they may have on our operations.
The FERC and other federal agencies, the U.S. Congress or state legislative bodies and regulatory agencies may consider additional proposals or proceedings that might affect the gas or oil industries. We cannot predict when or if these proposals will become effective or any effect they may have on our operations.
Some of those laws relate to resource conservation and equal employment opportunity. We do not believe that compliance with these laws will have a material adverse effect on us. 34 Table of Contents Human Capital Overview On December 31, 2023, the Company had 214 employees, none of whom were represented by labor unions or covered by any collective bargaining agreement.
Some of those laws relate to resource conservation and equal employment opportunity. We do not believe that compliance with these laws will have a material adverse effect on us. Human Capital Overview On December 31, 2024, the Company had 229 employees, none of whom were represented by labor unions or covered by any collective bargaining agreement.
Qualifications of Responsible Technical Persons Internal Engineers . Tony Lopez is the technical person at the Company, primarily responsible for overseeing and providing oversight of the preparation of the reserves estimates with our third-party reserve engineers. 15 Table of Contents Mr. Lopez has over 16 years of corporate reserve reporting experience. Mr.
Qualifications of Responsible Technical Persons Internal Engineers . Tony Lopez is the technical person at the Company, primarily responsible for overseeing and providing oversight of the preparation of the reserves estimates with our third-party reserve engineers. Mr. Lopez has over 17 years of corporate reserve reporting experience. Mr.
We currently do not discharge water to the surface. 21 Table of Contents For information regarding existing and proposed governmental regulations regarding hydraulic fracturing and related environmental matters, see “— Environmental, Occupational Health and Safety Matters and Regulations — Hydraulic Fracturing.” Insurance In accordance with customary industry practice, we maintain insurance against many, but not all, potential losses or liabilities arising from our operations and at costs that we believe to be economic.
For information regarding existing and proposed governmental regulations regarding hydraulic fracturing and related environmental matters, see “— Environmental, Occupational Health and Safety Matters and Regulations — Hydraulic Fracturing.” 23 Table of Contents Insurance In accordance with customary industry practice, we maintain insurance against many, but not all, potential losses or liabilities arising from our operations and at costs that we believe to be economic.
Marketing and Major Customers The following individual customers each accounted for 10% or more of our total reported revenues for the period indicated: ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, ​ 2023 2022 Major customers: ​ HF Sinclair Corporation (formerly: Sinclair Oil & Gas Company) 24 % 23 % Southwest Energy LP 13 % 13 % Phillips 66 ​ 17 % n/a % Koch Energy Services, LLC n/a % 13 % ​ The production sales agreements covering our properties contain customary terms and conditions for the oil and natural gas industry and provide for sales based on prevailing market prices.
Marketing and Major Customers The following individual customers each accounted for 10% or more of our total reported revenues for the period indicated: ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, ​ 2024 2023 Major customers: ​ Phillips 66 ​ 33 % 17 % HF Sinclair Corporation (formerly: Sinclair Oil & Gas Company) 25 % 24 % Southwest Energy LP 10 % 13 % ​ The production sales agreements covering our properties contain customary terms and conditions for the oil and natural gas industry and provide for sales based on prevailing market prices.
(2) Standardized measure is calculated in accordance with Accounting Standards Codification, or ASC, Topic 932, Extractive Activities—Oil and Gas , and is calculated using SEC pricing, before market differentials, of $78.22 per Bbl for crude oil and NGLs and $2.64 per MMBtu for natural gas.
(2) Standardized measure is calculated in accordance with Accounting Standards Codification, or ASC, Topic 932, Extractive Activities—Oil and Gas , and is calculated using SEC pricing, before market differentials, of $75.48 per Bbl for crude oil and NGLs and $2.13 per MMBtu for natural gas.
(“Amplify Energy,” the “Company,” “we,” “us,” “our,” or similar terms), is a publicly traded Delaware corporation, in which our common stock is listed on the NYSE under the symbol “AMPY.” Overview Amplify Energy is an independent oil and natural gas company engaged in the acquisition, development, exploitation and production of oil and natural gas properties.
(“Amplify Energy,” the “Company,” “we,” “us,” “our,” or similar terms), is a publicly traded Delaware corporation, in which our common stock, par value of $0.01 per share (“Common Stock”), is listed on the NYSE under the symbol “AMPY.” Overview Amplify Energy is an independent oil and natural gas company engaged in the acquisition, development, exploitation and production of oil and natural gas properties.
Pursuant to Executive Order 13990, BOEM conducted a review of the 2020 proposal and decided not to move forward with the BOEM-administered portions, and instead issued a new notice of proposed rulemaking to address the financial policy concerns.
Pursuant to prior Executive Order 13990, BOEM decided not to move forward with the BOEM-administered portions, and instead issued a new notice of proposed rulemaking to address the financial policy concerns.
Our proved reserves were estimated at the well or unit level for reporting purposes by CG&A, our independent reserve engineers. We maintain internal evaluations of our reserves in a secure reserve engineering database.
Our Oil and Natural Gas Data Our Reserves Internal Controls. Our proved reserves were estimated at the well or unit level for reporting purposes by CG&A, our independent reserve engineers. We maintain internal evaluations of our reserves in a secure reserve engineering database.
Our Oklahoma properties include wells and properties primarily located in Alfalfa and Woods counties in Oklahoma. Those properties collectively contained 29.5 MMBbls of estimated net proved reserves as of December 31, 2023 based on our reserve report and generated average net production of 5.5 MBoe/d for the three months ended December 31, 2023.
Our Oklahoma properties include wells and properties primarily located in Alfalfa and Woods counties in Oklahoma. Those properties collectively contained 27.0 MMBbls of estimated net proved reserves as of December 31, 2024 based on our reserve report and generated average net production of 4.7 MBoe/d for the three months ended December 31, 2024.
Additionally, at the 28th Conference of the Parties (“COP28”), nearly 200 countries, including the United States, entered into an agreement that calls for actions towards achieving, at a global scale, a tripling of renewable energy capacity and doubling energy efficiency improvements by 2030.
Additionally, at the United Nations Framework Convention on Climate Change 28th Conference of the Parties (“COP28”), nearly 200 countries entered into an agreement that calls for actions towards achieving, at a global scale, a tripling of renewable energy capacity and doubling energy efficiency improvements by 2030.
At December 31, 2023, we had no wells that were in various stages of completion. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2023 ​ 2022 ​ Gross Net Gross Net Development wells: ​ ​ ​ ​ Productive 9.0 0.5 27.0 1.1 Dry — — 1 0.1 Exploratory wells: Productive — — — — Dry — — — — Total wells: Productive 9.0 0.5 27.0 1.1 Dry — — 1.0 0.1 Total 9.0 0.5 28.0 1.2 ​ 19 Table of Contents Delivery Commitments We have no commitments to deliver a fixed and determinable quantity of our oil or natural gas production in the near future under our existing sales contracts.
At December 31, 2024, we had 24 gross (3.8 net) wells that were in various stages of completion. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2024 ​ 2023 ​ Gross Net Gross Net Development wells: ​ ​ ​ ​ Productive 11.0 2.0 9.0 0.5 Dry — — — — Exploratory wells: Productive — — — — Dry — — — — Total wells: Productive 11.0 2.0 9.0 0.5 Dry — — — — Total 11.0 2.0 9.0 0.5 ​ Delivery Commitments We have no commitments to deliver a fixed and determinable quantity of our oil or natural gas production in the near future under our existing sales contracts.
The Beta properties contained 12.7 MMBbls of estimated net proved oil reserves as of December 31, 2023 based on our reserve report and generated average net production of 3.0 MBoe/d for the three months ended December 31, 2023.
The Beta properties contained 19.1 MMBbls of estimated net proved oil reserves as of December 31, 2024 based on our reserve report and generated average net production of 3.3 MBoe/d for the three months ended December 31, 2024.
In addition, OSHA’s hazard communication standard requires that information be maintained about hazardous materials used or produced in our operations and that this information be provided to employees, state and local government authorities and citizens. Other OSHA standards regulate specific worker safety aspects of our operations.
In addition, OSHA’s hazard communication standard requires that information be maintained about hazardous materials used or produced in our operations and that this information be provided to employees, state and local government authorities and citizens. Other OSHA standards regulate specific worker safety aspects of our operations. Failure to comply with OSHA requirements can lead to the imposition of penalties.
Brooker graduated with honors from the University of Texas at Austin in 1989 with a Bachelor of Science degree in Petroleum Engineering and is a registered Professional Engineer in the State of Texas. He is also a member of the Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers.
Brooker graduated with honors from the University of Texas at Austin in 1989 with a Bachelor of Science degree in Petroleum Engineering and is a registered Professional Engineer in the State of Texas.
These studies could spur initiatives to further regulate hydraulic fracturing and could ultimately make it more difficult or costly for us to perform fracturing and increase our costs of compliance and doing business.
Government Accountability Office, have evaluated various other aspects of hydraulic fracturing. These studies could spur initiatives to further regulate hydraulic fracturing and could ultimately make it more difficult or costly for us to perform fracturing and increase our costs of compliance and doing business.
The following table sets forth information as of December 31, 2023 relating to our leasehold acreage. ​ ​ ​ ​ ​ ​ Region ​ Developed Acreage (1) ​ Gross (2) Net (3) Oklahoma 112,221 94,464 Bairoil 6,653 6,653 Beta 17,280 17,280 East Texas/ North Louisiana 243,101 181,460 Eagle Ford 14,167 811 Total 393,422 300,668 (1) Developed acres are acres spaced or assigned to productive wells or wells capable of production.
The following table sets forth information as of December 31, 2024 relating to our leasehold acreage. ​ ​ ​ ​ ​ ​ Region ​ Developed Acreage (1) ​ Gross (2) Net (3) Oklahoma 111,581 93,984 Bairoil 6,653 6,653 Beta 17,280 17,280 East Texas/ North Louisiana 243,101 181,460 Eagle Ford 14,167 811 Total 392,782 300,188 (1) Developed acres are acres spaced or assigned to productive wells or wells capable of production.
Drilling Activities Our drilling activities primarily consist of development wells. The following table sets forth information with respect to (i) wells drilled and completed during the periods indicated and (ii) wells drilled in a prior period but completed during the periods indicated.
The following table sets forth information with respect to (i) wells drilled and completed during the periods indicated and (ii) wells drilled in a prior period but completed during the periods indicated.
The information contained on, or connected to, our website is not incorporated by reference into this Annual Report and should not be considered part of this or any other report that we file with or furnish to the SEC.
The information contained on, or connected to, our website is not incorporated by reference into this Annual Report and should not be considered part of this or any other report that we file with or furnish to the SEC. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding the Company at www.sec.gov.
PHMSA updates the maximum administrative civil penalties each year to account for inflation, and as of December 2023, the penalty limits are up to $266,015 per violation per day and up to $2,660,135 for a related series of violations.
PHMSA updates the maximum administrative civil penalties each year to account for inflation, and as of December 2024, the penalty limits are up to $272,926 per violation per day and up to $2,729,245 for a related series of violations.
On November 30, 2022, the BLM also issued a proposed rule to reduce the waste of natural gas from venting, flaring, and leaks during oil and gas production activities on Federal and Indian leases, and a final rule is expected in January 2024.
In April 2024, and later revised in November 2024, the BLM issued a final rule to reduce the waste of natural gas from venting, flaring, and leaks during oil and gas production activities on Federal and Indian leases.
For example, the EPA released a report with findings and recommendations related to public concern about induced seismic activity from disposal wells. The report recommended strategies for managing and minimizing the potential for significant injection-induced seismic events.
For example, the EPA released a report with findings and recommendations related to public concern about induced seismic activity from disposal wells.
The goals of the agreement, among other things, is to accelerate efforts towards the phase-down of unabated coal power, phase out inefficient fossil fuel subsidies, and take other measures that drive the transition away from fossil fuels in energy systems. Various state and local governments have also publicly committed to furthering the goals of the Paris Agreement.
The goals of the agreement, among other things, are to accelerate efforts towards the phase-down of unabated coal power, phase out inefficient fossil fuel subsidies, and take other measures that drive the transition away from fossil fuels in energy systems.
None of our proved undeveloped reserves as of December 31, 2023 are scheduled to be developed on a date more than five years from the date the reserves were initially booked as PUDs. PUDs will be converted from undeveloped to developed as the applicable wells begin production.
None of our PUDs as of December 31, 2024 are scheduled to be developed on a date more than five years from the date the reserves were initially booked as PUDs. PUDs will be converted from undeveloped to developed as the applicable wells begin production. For the year ended December 31, 2024, total PUDs increased by 8,830 MBoe.
If we fail to pay royalties or comply with safety and environmental regulations, BOEM and BSEE may require that our operations on the Beta properties be suspended or terminated, and we may be subject to civil or criminal liability, which may have a negative impact on our operations, capital expenditures, earnings or competitive position. 23 Table of Contents In June 2022, the U.S.
If we fail to pay royalties or comply with safety and environmental regulations, BOEM and BSEE may require that our operations on the Beta properties be suspended or terminated, and we may be subject to civil or criminal liability, which may have a negative impact on our operations, capital expenditures, earnings or competitive position. 25 Table of Contents In addition to permits and approvals required by BOEM and BSEE, approvals and permits may be required from other agencies for the oil and gas operations associated with our Beta properties, such as the U.S.
This program requires the EPA to impose a “waste emissions charge” on certain oil and gas sources that are already required to report under EPA’s Greenhouse Gas Reporting Program. In order to implement the program, the Inflation Reduction Act required revisions to GHG reporting regulations for petroleum and natural gas systems (Subpart W) by 2024.
This program requires the EPA to impose a “waste emissions charge” on certain oil and gas sources that are already required to report under EPA’s Greenhouse Gas Reporting Program. To implement the program, in May 2024, the EPA finalized revisions to the Greenhouse Gas Reporting Program for petroleum and natural gas facilities.
Based on our reserve report, the Dacoma field contains more than 15% of our total estimated reserves.
Based on our reserve report, the Beta field contains more than 15% of our total estimated reserves as of December 31, 2024.
As of December 31, 2023, approximately 17% of our total workforce self-identified as a racial or ethnic minority and approximately 18% self-identified as female. As of the same date, approximately 29% of the employees located in our corporate headquarters self-identified as a racial or ethnic minority and approximately 49% self-identified as female.
As of December 31, 2024, approximately 15% of our total workforce self-identified as a racial or ethnic minority and approximately 16% self-identified as female. As of the same date, approximately 32% of the employees located in our corporate headquarters self-identified as a racial or ethnic minority and approximately 48% self-identified as female.
Our proved developed non-producing and proved undeveloped reserves make up 9.6% of the total proved reserves, with approximately 41.6% of these requiring hydraulic fracturing as of December 31, 2023.
Our proved developed non-producing and proved undeveloped reserves make up 19.4% of the total proved reserves, with approximately 30.7% of these requiring hydraulic fracturing as of December 31, 2024.
Upon flowback of the water, we dispose of it into approved disposal or injection wells.
Upon flowback of the water, we dispose of it into approved disposal or injection wells. We currently do not discharge water to the surface.
In May 2023, BOEM issued a new notice of proposed rulemaking proposing to modify criteria for determining whether oil, gas, and sulfur lessees, RUE grant holders, and pipeline right-of-way grant holders are required to provide bonds or other financial assurance above what is currently required to ensure compliance with OCS obligations.
In April 2024, BOEM announced a final rule, which modified criteria for determining whether oil, gas, and sulfur lessees, RUE grant holders, and pipeline right-of-way grant holders are required to provide bonds or other financial assurance above what is currently required to ensure compliance with OCS obligations.
As of December 31, 2023: ● Our total estimated proved reserves were approximately 98.1 MMBoe, consisted of approximately 42% oil, 38% natural gas, and 20% NGLs, and 98% were classified as proved developed reserves; ● We produced from 2,516 gross (1,348 net) producing wells across our properties, with an average working interest of 54%, and the Company is the operator of record of the properties containing 92% of our total estimated proved reserves; and ● Our average net production for the three months ended December 31, 2023, was 20.8 MBoe/d, implying a reserve-to-production ratio of approximately 12.9 years.
As of December 31, 2024: ● Our total estimated proved reserves were approximately 93.0 MMBoe, consisting of approximately 44% oil, 37% natural gas, and 19% NGLs, and 88% were classified as proved developed reserves; ● We produced oil and natural gas from 2,523 gross (1,353 net) producing wells across our properties, with an average working interest of 54%, and we are the operator of record of the properties containing 92% of our total estimated proved reserves; and ● Our average net production for the three months ended December 31, 2024, was 18.5 MBoe/d, implying a reserve-to-production ratio of approximately 13.8 years.
Other Regulation of the Oil and Natural Gas Industry The oil and natural gas industry is extensively regulated by numerous federal, state and local authorities. Legislation affecting the oil and natural gas industry is under constant review for amendment or expansion, frequently increasing the regulatory burden on our assets.
Legislation affecting the oil and natural gas industry is under constant review for amendment or expansion, frequently increasing the regulatory burden on our assets.
Additionally, a number of lawsuits and enforcement actions have been initiated across the country, alleging that hydraulic fracturing practices have induced seismic activity and adversely impacted drinking water supplies, use of surface water, and the environment generally. Several states and municipalities have adopted, or are considering adopting, regulations that could restrict or prohibit hydraulic fracturing in certain circumstances.
Additionally, a number of lawsuits and enforcement actions have been initiated across the country, alleging that hydraulic fracturing practices have induced seismic activity and adversely impacted drinking water supplies, use of surface water, and the environment generally.
Our Eagle Ford properties contained 2.5 MMBoe of estimated net proved reserves as of December 31, 2023 based on our reserve report. Those properties collectively generated average net production of 0.9 MBoe/d for the three months ended December 31, 2023. Our Oil and Natural Gas Data Our Reserves Internal Controls.
Our Eagle Ford properties include wells and properties in fields located primarily in the Eagleville fields. Our Eagle Ford properties contained 2.5 MMBoe of estimated net proved reserves as of December 31, 2024 based on our reserve report. Those properties collectively generated average net production of 0.7 MBoe/d for the three months ended December 31, 2024.
Any material inaccuracies in our reserve estimates or underlying assumptions will materially affect the quantities and present value of our estimated reserves.” Development of Proved Undeveloped Reserves As of December 31, 2023, we had 1,926 MBoe of proved undeveloped reserves (“PUDs”) comprised of 1,772 MBbls of oil, 451 MMcf of natural gas and 77 MBbls of NGLs.
Any material inaccuracies in our reserve estimates or underlying assumptions will materially affect the quantities and present value of our estimated reserves.” 18 Table of Contents Development of Proved Undeveloped Reserves As of December 31, 2024, we had 10,756 MBoe of PUDs, comprised of 9,083 MBbls of oil, 8,915 MMcf of natural gas and 187 MBbls of NGLs.
In the course of such evaluations, an agency evaluates the potential direct, indirect and cumulative impacts of a proposed project. If the proposed impacts are considered significant, the agency will prepare a detailed environmental impact statement that is made available for public review and comment.
If the proposed impacts are considered significant, the agency will prepare a detailed environmental impact statement that is made available for public review and comment.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, our obligations under our Revolving Credit Facility are secured by mortgages on not less than 90% of the PV-9 value of our oil and gas properties (and at least 90% of the PV-9 value of the proved, developed and producing oil and gas properties), and if we are unable to repay our indebtedness under our Revolving Credit Facility, the lenders could seek to foreclose on our assets.
Biggest changeIn addition, our obligations under our Revolving Credit Facility are secured by mortgages on not less than 90% of the PV-9 value of our oil and gas properties together with all or substantially all material midstream assets necessary to operate our proved, developed and producing oil and gas properties, and if we are unable to repay our indebtedness under our Revolving Credit Facility, the lenders could seek to foreclose on our assets. 40 Table of Contents Restrictive covenants in our Revolving Credit Facility could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests.
If for any reason we were to determine that it was probable that some or all of the accounts receivable from any one or more of the purchasers of our production were uncollectible, we would recognize a charge in the earnings of that period for the probable loss and could suffer a material reduction in our liquidity and cash flows.
If for any reason we were to determine that it was probable that some or all of the accounts receivable from any one or more of the purchasers of our production were uncollectible, we would recognize a charge to earnings of that period for the probable loss and could suffer a material reduction in our liquidity and cash flows.
Increasing attention from governmental and regulatory bodies, investors, consumers, industry and other stakeholders on responding to climate change, together with fuel conservation measures, alternative fuel requirements, incentives to conserve energy or use alternative energy sources, and development of, and increased demand from consumers and industry for, lower-emission products and services (including electric vehicles and renewable residential and commercial power supplies) as well as more efficient products and services, increasing consumer demand for alternatives to oil and natural gas (including wind, solar, nuclear, and geothermal sources as well as electric vehicles), societal expectations on companies to address climate change, investor and societal expectations regarding voluntary climate-related disclosures, and technological advances in fuel economy and energy transmission, storage, consumption and generation devices (including advances in wind, solar and hydrogen power, as well as battery technology), could reduce demand for oil and natural gas.
Increased attention from governmental and regulatory bodies, investors, consumers, industry and other stakeholders on responding to climate change, together with fuel conservation measures, alternative fuel requirements, incentives to conserve energy or use alternative energy sources, and development of, and increased demand from consumers and industry for, lower-emission products and services (including electric vehicles and renewable residential and commercial power supplies) as well as more efficient products and services, increasing consumer demand for alternatives to oil and natural gas (including wind, solar, nuclear, and geothermal sources as well as electric vehicles), societal expectations on companies to address climate change, investor and societal expectations regarding voluntary climate-related disclosures, and technological advances in fuel economy and energy transmission, storage, consumption and generation devices (including advances in wind, solar and hydrogen power, as well as battery technology), could reduce demand for oil and natural gas.
Any reduction in the borrowing base would materially and adversely affect our business and financing activities, limit our flexibility and management’s discretion in operating our business, and increase the risk that we may default on our debt obligations. In addition, as hedges roll off, the borrowing base is subject to further reduction.
Any material reduction in the borrowing base would materially and adversely affect our business and financing activities, limit our flexibility and management’s discretion in operating our business, and increase the risk that we may default on our debt obligations. In addition, as hedges roll off, the borrowing base is subject to further reduction.
Further, our development and production operations may be curtailed, delayed, canceled or otherwise negatively impacted as a result of other factors, including: ● high costs, shortages or delivery delays of rigs, equipment, labor, electrical power or other services; ● unusual or unexpected geological formations; ● composition of sour natural gas, including sulfur, carbon dioxide and other diluent content; ● unexpected operational events and conditions; ● failure of down hole equipment and tubulars; ● loss of wellbore mechanical integrity; ● failure, unavailability or shortage of capacity of gathering and transportation pipelines, or other transportation facilities; ● human errors, facility or equipment malfunctions and equipment failures or accidents, including acceleration of deterioration of our facilities and equipment due to the highly corrosive nature of sour natural gas; 42 Table of Contents ● title problems; ● loss of drilling fluid circulation; ● hydrocarbon or oilfield chemical spills; ● fires, blowouts, surface craterings and explosions; ● surface spills or underground migration due to uncontrollable flows of oil, natural gas, formation water or well fluids; ● delays imposed by or resulting from compliance with environmental and other governmental or regulatory requirements; and ● adverse weather conditions and natural disasters.
Further, our development and production operations may be curtailed, delayed, canceled or otherwise negatively impacted as a result of other factors, including: ● high costs, shortages or delivery delays of rigs, equipment, labor, electrical power or other services; ● unusual or unexpected geological formations; ● composition of sour natural gas, including sulfur, carbon dioxide and other diluent content; ● unexpected operational events and conditions; ● failure of down hole equipment and tubulars; ● loss of wellbore mechanical integrity; ● failure, unavailability or shortage of capacity of gathering and transportation pipelines, or other transportation facilities; ● human errors, facility or equipment malfunctions and equipment failures or accidents, including acceleration of deterioration of our facilities and equipment due to the highly corrosive nature of sour natural gas; ● title problems; ● loss of drilling fluid circulation; ● hydrocarbon or oilfield chemical spills; ● fires, blowouts, surface craterings and explosions; ● surface spills or underground migration due to uncontrollable flows of oil, natural gas, formation water or well fluids; ● delays imposed by or resulting from compliance with environmental and other governmental or regulatory requirements; and ● adverse weather conditions and natural disasters.
We may face pressure from stakeholders, many of whom are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability while at the same time remaining a successfully operating public company.
We may face pressure from stakeholders, many of whom are focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability while at the same time remaining a successfully operating public company.
The passage of any legislation as a result of these proposals or any other similar changes in U.S. federal income tax laws could eliminate or postpone certain tax deductions that are currently available with respect to oil and natural gas exploration and development and any such change could have an adverse effect on the Company’s financial position, results of operations and cash flows. 54 Table of Contents Our business could be negatively affected by security threats, including cybersecurity threats, destructive forms of protest and opposition by activists and other disruptions.
The passage of any legislation as a result of these proposals or any other similar changes in U.S. federal income tax laws could eliminate or postpone certain tax deductions that are currently available with respect to oil and natural gas exploration and development and any such change could have an adverse effect on the Company’s financial position, results of operations and cash flows. 56 Table of Contents Our business could be negatively affected by security threats, including cybersecurity threats, destructive forms of protest and opposition by activists and other disruptions.
For further discussion regarding the transition risks posed to us by climate change-related regulations, policies and initiatives, see the discussion below in “—Climate change legislation or regulations restricting emissions of “greenhouse gases,” or GHGs, could result in increased operating costs and reduced demand for the oil and natural gas that we produce, while the physical effects of climate change could disrupt our production and cause us to incur significant costs in preparing for or responding to those effects.” 49 Table of Contents Increasing scrutiny and changing stakeholder expectations in respect of environmental, social and governance (“ESG”) and sustainability practices may have an adverse effect on our business, financial condition and results of operations and damage our reputation.
For further discussion regarding the transition risks posed to us by climate change-related regulations, policies and initiatives, see the discussion below in “—Climate change legislation or regulations restricting emissions of “greenhouse gases,” or GHGs, could result in increased operating costs and reduced demand for the oil and natural gas that we produce, while the physical effects of climate change could disrupt our production and cause us to incur significant costs in preparing for or responding to those effects.” Increasing scrutiny and changing stakeholder expectations in respect of environmental, social and governance (“ESG”) and sustainability practices may have an adverse effect on our business, financial condition and results of operations and damage our reputation.
Business — Environmental, Occupational Health and Safety Matters and Regulations” and “— Other Regulation of the Oil and Natural Gas Industry” for a description of the laws and regulations that affect the third parties on whom we rely for gathering and transportation services. 52 Table of Contents Oil and natural gas producers’ operations, especially those using hydraulic fracturing, are substantially dependent on the availability of water and the disposal of waste, including produced water and drilling fluids.
Business — Environmental, Occupational Health and Safety Matters and Regulations” and “— Other Regulation of the Oil and Natural Gas Industry” for a description of the laws and regulations that affect the third parties on whom we rely for gathering and transportation services. 54 Table of Contents Oil and natural gas producers’ operations, especially those using hydraulic fracturing, are substantially dependent on the availability of water and the disposal of waste, including produced water and drilling fluids.
Climate change legislation or regulations restricting emissions of “greenhouse gases,” or GHGs, could result in increased operating costs and reduced demand for the oil and natural gas that we produce, while the physical effects of climate change could disrupt our production and cause us to incur significant costs in preparing for or responding to those effects.
Climate change legislation or regulations pertaining to emissions of “greenhouse gases,” or GHGs, could result in increased operating costs and reduced demand for the oil and natural gas that we produce, while the physical effects of climate change could disrupt our production and cause us to incur significant costs in preparing for or responding to those effects.
Restrictions on hydraulic fracturing could also reduce the amount of oil and natural gas that we are ultimately able to produce from our reserves. 53 Table of Contents The cost of decommissioning is uncertain. We are required to maintain reserve funds to provide for the payment of decommissioning costs associated with the Beta properties.
Restrictions on hydraulic fracturing could also reduce the amount of oil and natural gas that we are ultimately able to produce from our reserves. 55 Table of Contents The cost of decommissioning is uncertain. We are required to maintain reserve funds to provide for the payment of decommissioning costs associated with the Beta properties.
No impairment expense was recognized for the years ended December 31, 2023 and 2022. An extended decline in commodity prices may cause us to write down, as a non-cash charge to earnings, the carrying value of our oil and natural gas properties for impairments.
No impairment expense was recognized for the years ended December 31, 2024 and 2023. An extended decline in commodity prices may cause us to write down, as a non-cash charge to earnings, the carrying value of our oil and natural gas properties for impairments.
We are vulnerable to the risks associated with operating offshore Southern California, including risks relating to: ● impacts of climate change and natural disasters such as earthquakes, tidal waves, mudslides, fires and floods; ● oil field service costs and availability; ● compliance with environmental and other laws and regulations; ● third-party marine vessels, including situations similar to the Incident; ● remediation and other costs resulting from oil spills, releases of hazardous materials and other environmental and natural resource damages; and 45 Table of Contents ● failure of equipment or facilities.
We are vulnerable to the risks associated with operating offshore Southern California, including risks relating to: ● impacts of climate change and natural disasters such as earthquakes, tidal waves, mudslides, fires and floods; ● oil field service costs and availability; ● compliance with environmental and other laws and regulations; ● third-party marine vessels, including situations similar to the Incident; ● remediation and other costs resulting from oil spills, releases of hazardous materials and other environmental and natural resource damages; and ● failure of equipment or facilities.
For example, for the five years ended December 31, 2023, the NYMEX-WTI oil future price ranged from a high of $122.11 per Bbl to a low of $(37.63) per Bbl, while the NYMEX-Henry Hub natural gas future price ranged from a high of $9.68 per MMBtu to a low of $1.48 per MMBtu.
For example, for the five years ended December 31, 2024, the NYMEX-WTI oil future price ranged from a high of $122.11 per Bbl to a low of $(37.63) per Bbl, while the NYMEX-Henry Hub natural gas future price ranged from a high of $9.68 per MMBtu to a low of $1.48 per MMBtu.
Our future oil and natural gas reserves and, production and therefore, our cash flow are highly dependent on our success in efficiently developing and exploiting our current reserves. Our production decline rates may be significantly higher than currently estimated if our wells do not produce as expected.
Our future oil and natural gas reserves and production and therefore, our cash flows, are highly dependent on our success in efficiently developing and exploiting our current reserves. Our production decline rates may be significantly higher than currently estimated if our wells do not produce as expected.
The goals of the agreement, among other things, is to accelerate efforts towards the phase-down of unabated coal power, phase out inefficient fossil fuel subsidies, and take other measures that drive the transition away from fossil fuels in energy systems.
The goals of the agreement, among other things, are to accelerate efforts towards the phase-down of unabated coal power, phase out inefficient fossil fuel subsidies, and take other measures that drive the transition away from fossil fuels in energy systems.
Even if our credit review and analysis mechanisms work properly, we may experience financial losses in our dealings with other parties. Any increase in the nonpayment or nonperformance by our vendors and/or counterparties could adversely affect our business, financial condition, results of operations and cash flows. 46 Table of Contents We may be unable to compete effectively with larger companies.
Even if our credit review and analysis mechanisms work properly, we may experience financial losses in our dealings with other parties. Any increase in the nonpayment or nonperformance by our vendors and/or counterparties could adversely affect our business, financial condition, results of operations and cash flows. We may be unable to compete effectively with larger companies.
As such, our actual drilling and enhanced recovery activities may materially differ from our current expectations, which could have a significant adverse effect on our estimated reserves, financial condition, results of operations and cash flows. Part of our strategy may involve using horizontal drilling and completion techniques, which involve risks and uncertainties in their application.
As such, our actual drilling and enhanced recovery activities may materially differ from our current expectations, which could have a significant adverse effect on our estimated reserves, financial condition, results of operations and cash flows. 45 Table of Contents Part of our strategy may involve using horizontal drilling and completion techniques, which involve risks and uncertainties in their application.
Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves, which could adversely affect our business, results of operations and financial condition. 41 Table of Contents The standardized measure of our estimated proved reserves is not necessarily the same as the current market value of our estimated proved oil and natural gas reserves.
Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves, which could adversely affect our business, results of operations and financial condition. The standardized measure of our estimated proved reserves is not necessarily the same as the current market value of our estimated proved oil and natural gas reserves.
If we reduce our capital spending in an effort to conserve cash, this would likely result in production being lower than anticipated, and could result in reduced revenues, cash flow from operations and income.
If we reduce our capital spending in an effort to conserve cash, this would likely result in production being lower than anticipated, and could result in reduced revenues, cash flows from operations and income.
Any delay in the development of new wells or a significant increase in development costs could reduce our revenues and impact our development plan, which would thus affect our financial conduction, results of operations and our cash flows. We may incur losses as a result of title defects in the properties in which we invest.
Any delay in the development of new wells or a significant increase in development costs could reduce our revenues and impact our development plan, which would thus affect our financial conduction, results of operations and our cash flows. 46 Table of Contents We may incur losses as a result of title defects in the properties in which we invest.
Any inability to compete effectively with larger companies could have a material adverse impact on our business activities, financial condition, results of operations and cash flows. Our business depends in part on pipelines, gathering systems and processing facilities owned by us or others.
Any inability to compete effectively with larger companies could have a material adverse impact on our business activities, financial condition, results of operations and cash flows. 48 Table of Contents Our business depends in part on pipelines, gathering systems and processing facilities owned by us or others.
In February 2021, the current administration announced reentry of the U.S. into the Paris Agreement along with a new “nationally determined contribution” for the U.S. GHG emissions that would achieve emissions reductions of at least 50% relative to 2005 levels by 2030.
In February 2021, the prior Biden Administration announced reentry of the U.S. into the Paris Agreement along with a new “nationally determined contribution” for the U.S. GHG emissions that would achieve emissions reductions of at least 50% relative to 2005 levels by 2030.
If we are unable or unwilling to provide additional collateral, we may have to pursue alternate bonding arrangements with other sureties. See Note 6, “Asset Retirement Obligations” and Note 16, “Commitments and Contingencies — Supplemental Bond for Decommissioning Liabilities Trust Agreement” of the Notes to Consolidated Financial Statements included under Part II, “Item 8.
If we are unable or unwilling to provide additional collateral, we may have to pursue alternate bonding arrangements with other sureties. See Note 7, “Asset Retirement Obligations” and Note 18, “Commitments and Contingencies — Supplemental Bond for Decommissioning Liabilities Trust Agreement” of the Notes to Consolidated Financial Statements included under Part II, “Item 8.
The terms and conditions of our Revolving Credit Facility affect us in several ways, including: ● requiring us to dedicate a substantial portion of our cash flow from operations to service our existing debt, thereby reducing the cash available to finance our operations and other business activities and could limit our flexibility in planning for or reacting to changes in our business and the industry in which we operate; ● increasing our vulnerability to economic downturns and adverse developments in our business; ● limiting our ability to access the capital markets to raise capital on favorable terms or to obtain additional financing for working capital, capital expenditures or acquisitions or to refinance existing indebtedness; ● placing restrictions on our ability to obtain additional financing, make investments, lease equipment, sell assets and engage in business combinations; ● placing us at a competitive disadvantage relative to competitors with lower levels of indebtedness in relation to their overall size or less restrictive terms governing their indebtedness; and ● limiting management’s discretion in operating our business.
The terms and conditions of our Revolving Credit Facility affect us in several ways, including: ● requiring us to dedicate a substantial portion of our cash flow from operations to service our existing debt, thereby reducing the cash available to finance our operations and other business activities and could limit our flexibility in planning for or reacting to changes in our business and the industry in which we operate; ● increasing our vulnerability to economic downturns and adverse developments in our business; ● limiting our ability to access the capital markets to raise capital on favorable terms or to obtain additional financing for working capital, capital expenditures or acquisitions or to refinance existing indebtedness; ● placing restrictions on our ability to obtain additional financing, make investments, lease equipment, sell assets and engage in business combinations; ● placing us at a competitive disadvantage relative to competitors with lower levels of indebtedness in relation to their overall size or less restrictive terms governing their indebtedness; and ● limiting management’s discretion in operating our business. 41 Table of Contents Our lenders periodically redetermine the amount we may borrow under our Revolving Credit Facility, which may materially impact our operations.
Historically, oil and natural gas prices have been volatile and fluctuate in response to changes in supply and demand, market uncertainty, and other factors that are beyond our control, including: ● the regional, domestic and foreign supply of oil, natural gas and NGLs; ● the level of commodity prices and expectations about future commodity prices; ● the level of global oil and natural gas exploration and production; ● localized supply and demand fundamentals, including the proximity and capacity of pipelines and other transportation facilities, and other factors that result in differentials to benchmark prices from time to time; ● the cost of exploring for developing, producing and transporting reserves; ● the price and quantity of foreign imports; ● political and economic conditions in oil producing countries, including conflicts in or among the Middle East, Africa, South America, Russia and Israel; ● the ability of members of the Organization of Petroleum Exporting Countries (“OPEC”) to agree to and maintain oil price and production controls; ● speculative trading in crude oil and natural gas derivative contracts; ● the level of consumer product demand; ● weather conditions and other natural disasters; ● risks associated with operating drilling rigs; ● technological advances affecting exploration and production operations and overall energy consumption; ● domestic and foreign governmental regulations and taxes; ● the impact of energy conservation efforts; 37 Table of Contents ● the continued threat of terrorism and the impact of military and other action, including the Russian invasion of Ukraine and the Israel-Hamas war and the potential destabilizing effect such conflicts may pose for the European continent or the global oil and natural gas markets; ● the price and availability of competitors’ supplies of oil and natural gas and alternative fuels; and ● overall domestic and global economic conditions.
Historically, oil and natural gas prices have been volatile and fluctuate in response to changes in supply and demand, market uncertainty, and other factors that are beyond our control, including: ● the regional, domestic and foreign supply of oil, natural gas and NGLs; 38 Table of Contents ● the level of commodity prices and expectations about future commodity prices; ● the level of global oil and natural gas exploration and production; ● localized supply and demand fundamentals, including the proximity and capacity of pipelines and other transportation facilities, and other factors that result in differentials to benchmark prices from time to time; ● the cost of exploring for developing, producing and transporting reserves; ● the price and quantity of foreign imports, including volatility as a result of tariffs and other trade-related disputes; ● political and economic conditions in oil producing countries, including conflicts in or among the Middle East, Africa, South America, Russia and Israel; ● the ability of members of the Organization of Petroleum Exporting Countries (“OPEC”) to agree to and maintain oil price and production controls; ● speculative trading in crude oil and natural gas derivative contracts; ● the level of consumer product demand; ● weather conditions and other natural disasters; ● risks associated with a pandemic, epidemic or outbreak of an infectious disease; ● risks associated with operating drilling rigs; ● technological advances affecting exploration and production operations and overall energy consumption; ● domestic and foreign governmental regulations and taxes; ● the impact of energy conservation efforts; ● the continued threat of terrorism and the impact of military and other action, including the Russian invasion of Ukraine and ongoing conflicts in the Middle East, and the potential destabilizing effect such conflicts may pose for those regions and/or the global oil and natural gas markets; ● the price and availability of competitors’ supplies of oil and natural gas and alternative fuels; and ● overall domestic and global economic conditions.
A breach of any of these covenants could result in a default under our Revolving Credit Facility. If a default occurs and remains uncured or unwaived, the administrative agent or majority lenders under our Revolving Credit Facility may elect to declare all borrowings outstanding thereunder, if any, together with accrued interest and other fees, to be immediately due and payable.
If a default occurs and remains uncured or unwaived, the administrative agent or majority lenders under our Revolving Credit Facility may elect to declare all borrowings outstanding thereunder, if any, together with accrued interest and other fees, to be immediately due and payable.
A prolonged economic slowdown or recession, adverse events relating to the energy industry, or regional, national, or global economic conditions and factors, particularly a slowdown in the exploration and production industry, could negatively impact our operations and therefore adversely affect our results.
A prolonged economic slowdown or recession, adverse events relating to the energy industry, volatility due to tariffs or other trade-related disputes, or regional, national, or global economic conditions and factors, particularly a slowdown in the exploration and production industry, could negatively impact our operations and therefore adversely affect our results.
Under certain environmental laws that impose strict as well as joint and several liability, we may be required to remediate contaminated properties currently or formerly owned or operated by us or facilities of third parties that received waste generated by our operations regardless of whether such contamination resulted from the conduct of others or from consequences of our own actions that were in compliance with all applicable laws at the time those actions were taken.
Thus, our costs of compliance may increase if existing laws and regulations are revised or reinterpreted, or if new laws and regulations become applicable to our operations. 49 Table of Contents Under certain environmental laws that impose strict as well as joint and several liability, we may be required to remediate contaminated properties currently or formerly owned or operated by us or facilities of third parties that received waste generated by our operations regardless of whether such contamination resulted from the conduct of others or from consequences of our own actions that were in compliance with all applicable laws at the time those actions were taken.
Additionally, new regulations and legislation, as well as evolving practices, may increase the cost of compliance, require changes to our operations and strategic plans and impact our ability to capitalize on our assets. The Incident may impact our ability to access financing on acceptable terms and may materially impact our liquidity.
Additionally, new regulations and legislation, as well as evolving practices, may increase the cost of compliance, require changes to our operations and strategic plans and impact our ability to capitalize on our assets.
If commodity prices decline for a prolonged period, a significant portion of our development projects may become uneconomic and result in write downs of the value of our oil and natural gas properties, which may adversely affect our financial condition and our ability to fund our operations.
A further or extended decline in commodity prices could materially and adversely affect our business, results of operations and financial condition. 39 Table of Contents If commodity prices decline for a prolonged period, a significant portion of our development projects may become uneconomic and result in write downs of the value of our oil and natural gas properties, which may adversely affect our financial condition and our ability to fund our operations.
If, under our CO 2 supply contracts, the supplier is unable to deliver its contractually required quantities of CO 2 to us, or if our ability to access adequate supplies is impeded, then we may not have sufficient CO 2 to produce oil and natural gas in the manner or to the extent that we anticipate, and our future oil and gas production volumes will be negatively impacted. 43 Table of Contents Many of our properties are in areas that may have been partially depleted or drained by offset wells.
If, under our CO 2 supply contracts, the supplier is unable to deliver its contractually required quantities of CO 2 to us, or if our ability to access adequate supplies is impeded, then we may not have sufficient CO 2 to produce oil and natural gas in the manner or to the extent that we anticipate, and our future oil and gas production volumes will be negatively impacted.
Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions (including those related to carbon pricing schemes) would impact our business, any such future laws and regulations that require reporting of GHGs or otherwise limit emissions of GHGs from our equipment and operations could require us to incur costs to monitor and report on GHG emissions or reduce emissions of GHGs associated with our operations, and such requirements also could adversely affect demand for the oil and natural gas that we produce and restrict our ability to execute on our business strategy, reducing our access to financial markets, or create greater potential for governmental investigations or litigation. 51 Table of Contents Finally, most scientists have concluded that increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts and floods and other climatic events.
Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions (including those related to carbon pricing schemes) would impact our business, any such future laws and regulations that require reporting of GHGs or otherwise limit emissions of GHGs from our equipment and operations could require us to incur costs to monitor and report on GHG emissions or reduce emissions of GHGs associated with our operations, and such requirements also could adversely affect demand for the oil and natural gas that we produce and restrict our ability to execute on our business strategy, reducing our access to financial markets, or create greater potential for governmental investigations or litigation.
In August 2022, President Biden signed into law the Inflation Reduction Act of 2022. Among other things, the Inflation Reduction Act includes a methane emissions reduction program that amends the CAA to include a Methane Emissions and Waste Reduction Incentive Program for petroleum and natural gas systems.
Among other things, the Inflation Reduction Act includes a methane emissions reduction program that amends the CAA to include a Methane Emissions and Waste Reduction Incentive Program for petroleum and natural gas systems.
This program requires the EPA to impose a “waste emissions charge” on certain oil and gas sources that are already required to report under EPA’s Greenhouse Gas Reporting Program. In order to implement the program, the Inflation Reduction Act required revisions to GHG reporting regulations for petroleum and natural gas systems (Subpart W) by 2024.
This program requires the EPA to impose a “waste emissions charge” on certain oil and gas sources that are already required to report under EPA’s Greenhouse Gas Reporting Program. To implement the program, in May 2024, the EPA finalized revisions to the Greenhouse Gas reporting Program for petroleum and natural gas facilities.
We may also be impacted by significant disruptions to the operations of our logistics and service providers. Loss of our key executive officers or other key personnel, or an inability to attract and retain such officers and personnel, could negatively affect our business. Our future success depends on the skills, experience and efforts of our key executive officers.
Loss of our key executive officers or other key personnel, or an inability to attract and retain such officers and personnel, could negatively affect our business. Our future success depends on the skills, experience and efforts of our key executive officers.
If we do not adapt to or comply with investor or other stakeholder expectations and standards on sustainability matters as they continue to evolve, meet sustainability-related goals that we have set, or if we are perceived to have not responded appropriately or quickly enough to growing concern for sustainability issues, regardless of whether there is a regulatory or legal requirement to do so, we may suffer from reputational damage and our business, financial condition and/or stock price could be materially and adversely affected.
If we do not adapt to or comply with investor or other stakeholder expectations and standards on sustainability matters as they continue to evolve, meet sustainability-related goals that we have set, or if we are perceived to have not responded appropriately or quickly enough to growing concern for sustainability issues, regardless of whether there is a regulatory or legal requirement to do so, we may suffer from reputational damage and our business, financial condition and/or stock price could be materially and adversely affected. 51 Table of Contents In addition, the Company’s continuing efforts to research, establish, accomplish, and accurately report on the implementation of our sustainability strategy, including any specific sustainability objectives, may also create additional operational risks and expenses and expose us to reputational, legal, and other risks.
An adverse development in the oil and natural gas business of any of these geographic areas, such as in our ability to attract and retain field personnel or in our ability to comply with local regulations, could adversely affect our business, financial condition, results of operations and cash flows.
An adverse development in the oil and natural gas business of any of these geographic areas, such as in our ability to attract and retain field personnel or in our ability to comply with local regulations, could adversely affect our business, financial condition, results of operations and cash flows. 47 Table of Contents We are dependent upon a small number of significant customers for a substantial portion of our production sales.
Our estimated reserves and future production rates are based on many assumptions that may turn out to be inaccurate. Any material inaccuracies in our reserve estimates or underlying assumptions will materially affect the quantities and present value of our estimated reserves. It is not possible to measure underground accumulations of oil or natural gas in an exact way.
Any material inaccuracies in our reserve estimates or underlying assumptions will materially affect the quantities and present value of our estimated reserves. It is not possible to measure underground accumulations of oil or natural gas in an exact way. The process of estimating natural gas and oil reserves is complex.
We had three customers that each accounted for 10% or more of total reported revenues for the year ended December 31, 2023. The loss of these customers or any significant customer, should we be unable to replace them, could adversely affect our revenues and have a material adverse effect on our financial condition and results of operations.
The loss of these customers or any significant customer, should we be unable to replace them, could adversely affect our revenues and have a material adverse effect on our financial condition and results of operations.
These restrictions limit our ability to, among other things: ● incur additional liens; ● incur additional indebtedness; ● merge, consolidate or sell our assets; ● pay dividends or make other distributions or repurchase or redeem our stock; ● make certain investments; and ● enter into transactions with our affiliates. 39 Table of Contents Our Revolving Credit Facility also requires us to comply with certain financial maintenance covenants as discussed above.
These restrictions limit our ability to, among other things: ● incur additional liens; ● incur additional indebtedness; ● merge, consolidate or sell our assets; ● pay dividends or make other distributions or repurchase or redeem our stock; ● make certain investments; and ● enter into transactions with our affiliates.
Many of our properties are in areas that may have already been partially depleted or drained by earlier offset drilling. The owners of leasehold interests lying contiguous or adjacent to or adjoining any of our properties could take actions, such as drilling additional wells that could adversely affect our operations.
The owners of leasehold interests lying contiguous or adjacent to or adjoining any of our properties could take actions, such as drilling additional wells that could adversely affect our operations.
A liability, claim or other loss not fully covered by insurance could have a material adverse effect on our business, financial position, results of operations and cash flows.
A liability, claim or other loss not fully covered by insurance could have a material adverse effect on our business, financial position, results of operations and cash flows. The production from our Bairoil properties could be adversely affected by the cessation or interruption of the supply of CO 2 to those properties.
If any such effects were to occur, they could have an adverse effect on our financial condition and results of operations. For example, such effects could adversely affect or delay demand for the oil or natural gas produced or cause us to incur significant costs in preparing for or responding to the effects of climatic events themselves.
For example, such effects could adversely affect or delay demand for the oil or natural gas produced or cause us to incur significant costs in preparing for or responding to the effects of climatic events themselves.
Business — Environmental, Occupational Health and Safety Matters and Regulations” and “— Other Regulation of the Oil and Natural Gas Industry” for a description of the more significant laws and regulations that affect us. 48 Table of Contents Our business is subject to climate-related transition risks, including fuel conservation measures, technological advances and increasing public attention to climate change and environmental matters, which could reduce demand for oil and natural gas and have an adverse effect on our business, financial condition and reputation.
Our business is subject to climate-related transition risks, including fuel conservation measures, technological advances and increasing public attention to climate change and environmental matters, which could reduce demand for oil and natural gas and have an adverse effect on our business, financial condition and reputation.
The process of estimating natural gas and oil reserves is complex. It requires interpretations of available technical data and many assumptions, including assumptions relating to current and future economic conditions and commodity prices. Any significant inaccuracies in these interpretations or assumptions could materially affect our estimated quantities and present value of our reserves.
It requires interpretations of available technical data and many assumptions, including assumptions relating to current and future economic conditions and commodity prices. Any significant inaccuracies in these interpretations or assumptions could materially affect our estimated quantities and present value of our reserves. In order to prepare our estimates, we must project production rates and timing of operating and development expenditures.
Any significant variance could materially affect the estimated quantities and present value of our reserves. In addition, we may adjust our reserve estimates to reflect production history, results of development, existing commodity prices and other factors, many of which are beyond our control.
In addition, we may adjust our reserve estimates to reflect production history, results of development, existing commodity prices and other factors, many of which are beyond our control. You should not assume that the present value of future net revenues from our reserves is the current market value of our estimated reserves.
Moreover, parties concerned about the potential effects of climate change have directed their attention at sources of funding for energy companies, which has resulted in certain financial institutions, funds and other sources of capital, restricting or eliminating their investment in oil and natural gas activities.
If one or more of the technologies we use now or in the future were to become obsolete, our business, financial condition or results of operations could be materially and adversely affected. 50 Table of Contents Moreover, parties concerned about the potential effects of climate change have directed their attention at sources of funding for energy companies, which has resulted in certain financial institutions, funds and other sources of capital, restricting or eliminating their investment in oil and natural gas activities.
If our drilling results are less than anticipated, the return on our investment for a particular project may not be as attractive as we anticipated and we could incur material write-downs of unevaluated properties, and the value of our undeveloped acreage could decline in the future. 44 Table of Contents Our potential use of 2-D and 3-D seismic data is subject to interpretation and may not accurately identify the presence of oil and natural gas, which could adversely affect the results of our drilling operations.
If our drilling results are less than anticipated, the return on our investment for a particular project may not be as attractive as we anticipated and we could incur material write-downs of unevaluated properties, and the value of our undeveloped acreage could decline in the future.
Therefore, because our oil requires more complex refining equipment to convert it into high value products, it may sell at a discount to those prices. These discounts, if significant, could reduce our cash flows and adversely affect our results of operations and financial condition.
Therefore, because our oil requires more complex refining equipment to convert it into high value products, it may sell at a discount to those prices.
The fee imposed under the Methane Emissions and Waste Reduction Incentive Program for 2024 would be $900 per ton emitted over annual methane emissions thresholds, and would increase to $1,200 in 2025, and $1,500 in 2026.
In November 2024, the EPA finalized a regulation to implement the Inflation Reduction Act’s Waste Emissions Charge which became effective on January 1, 2025. The fee imposed under the Methane Emissions and Waste Reduction Incentive Program for 2024 is $900 per ton emitted over annual methane emissions thresholds, and increases to $1,200 in 2025, and $1,500 in 2026.
You should not assume that the present value of future net revenues from our reserves is the current market value of our estimated reserves. We generally base the estimated discounted future net cash flows from our reserves on prices and costs on the date of the estimate.
We generally base the estimated discounted future net cash flows from our reserves on prices and costs on the date of the estimate. Actual future prices and costs may differ materially from those used in the present value estimate.
Further, if the borrowing base under our Revolving Credit Facility decreases, or our revenues decrease, as a result of lower oil or natural gas prices or for any other reason, we may not be able to obtain the capital necessary to sustain our operations.
Further, if the borrowing base under our Revolving Credit Facility decreases, or our revenues decrease, as a result of lower oil or natural gas prices or for any other reason, we may not be able to obtain the capital necessary to sustain our operations. 43 Table of Contents Developing and producing oil and natural gas are costly and high-risk activities with many uncertainties that may result in a total loss of investment or otherwise adversely affect our business, financial condition, results of operations and cash flows.
Inflationary factors, such as increases in the labor costs, material costs, and overhead costs, may also adversely affect our financial position and operating results.
Inflationary factors, such as increases in the labor costs, material costs, and overhead costs, may also adversely affect our financial position and operating results. Inflation has also resulted in higher interest rates in the United States, which could increase our cost of debt borrowing in the future.
Failure to comply with laws and regulations applicable to our operations, including any evolving interpretation and enforcement by governmental authorities, could have a material adverse effect on our business, financial condition, results of operations and cash flows. 47 Table of Contents Our oil and natural gas development and production operations are also subject to stringent and complex federal, state and local laws and regulations governing the discharge of materials into the environment, worker health and safety aspects of our operations, or otherwise relating to environmental protection.
Our oil and natural gas development and production operations are also subject to stringent and complex federal, state and local laws and regulations governing the discharge of materials into the environment, worker health and safety aspects of our operations, or otherwise relating to environmental protection.
Any of these risks can cause substantial losses, including personal injury or loss of life, damage to or destruction of property, natural resources and equipment, pollution, environmental contamination or loss of wells and other regulatory penalties.
The location of any properties and other assets near populated areas, including residential areas, commercial business centers and industrial sites, could significantly increase the level of potential damages resulting from these risks. 44 Table of Contents Any of these risks can cause substantial losses, including personal injury or loss of life, damage to or destruction of property, natural resources and equipment, pollution, environmental contamination or loss of wells and other regulatory penalties.
For the year ended December 31, 2023, the WTI posted prices ranged from a high of $93.68 per Bbl on September 27, 2023 to a low of $66.74 per Bbl on March 17, 2023 and NYMEX-Henry Hub natural gas market price ranged from a high of $4.17 per MMBtu on January 4, 2023 to a low of $1.99 per MMBtu on March 29, 2023.
For the year ended December 31, 2024, the WTI posted prices ranged from a high of $86.91 per Bbl on April 5, 2024 to a low of $65.75 per Bbl on September 10, 2024 and NYMEX-Henry Hub natural gas market price ranged from a high of $3.95 per MMBtu on December 24, 2024 to a low of $1.58 per MMBtu on February 15, 2024.
In such event, any federal onshore oil and natural gas leases held by us could be subject to cancellation based on such determination. See “Item 1.
In such event, any federal onshore oil and natural gas leases held by us could be subject to cancellation based on such determination. See “Item 1. Business — Environmental, Occupational Health and Safety Matters and Regulations” and “— Other Regulation of the Oil and Natural Gas Industry” for a description of the more significant laws and regulations that affect us.
If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even if the amount borrowed remained the same, and our net income and cash available for servicing our indebtedness would decrease. 40 Table of Contents Our hedging strategy may not effectively mitigate the impact of commodity price volatility from our cash flows, and our hedging activities could result in cash losses and may limit potential gains.
If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even if the amount borrowed remained the same, and our net income and cash available for servicing our indebtedness would decrease.
In addition, our operations are subject to risks associated with hydraulic fracturing, including any mishandling, surface spillage or potential underground migration of fracturing fluids, including chemical additives. The location of any properties and other assets near populated areas, including residential areas, commercial business centers and industrial sites, could significantly increase the level of potential damages resulting from these risks.
In addition, our operations are subject to risks associated with hydraulic fracturing, including any mishandling, surface spillage or potential underground migration of fracturing fluids, including chemical additives.
The effect of fluctuations on supply and demand may become more pronounced within specific geographic oil and natural gas producing areas, which may cause these conditions to occur with greater frequency or magnify the effects of these conditions.
The effect of fluctuations on supply and demand may become more pronounced within specific geographic oil and natural gas producing areas, which may cause these conditions to occur with greater frequency or magnify the effects of these conditions. 53 Table of Contents The listing of a species as either “threatened” or “endangered” under the federal Endangered Species Act could result in increased costs, new operating restrictions, or delays in our operations, which could adversely affect our results of operations and financial condition.
The process also requires economic assumptions about matters such as natural gas and oil prices, drilling and operating expenses, capital expenditures and availability of funds. Actual future production, oil prices, natural gas prices, revenues, development expenditures, operating expenses and quantities of recoverable reserves will vary from our estimates.
Actual future production, oil prices, natural gas prices, revenues, development expenditures, operating expenses and quantities of recoverable reserves will vary from our estimates. Any significant variance could materially affect the estimated quantities and present value of our reserves.
We are dependent upon a small number of significant customers for a substantial portion of our production sales. The loss of those customers, if not replaced, could reduce our revenues and have a material adverse effect on our financial condition and results of operations.
The loss of those customers, if not replaced, could reduce our revenues and have a material adverse effect on our financial condition and results of operations. We had three customers that each accounted for 10% or more of total reported revenues for the year ended December 31, 2024.
We may not be able to respond to these competitive pressures or implement new technologies on a timely basis or at an acceptable cost. If one or more of the technologies we use now or in the future were to become obsolete, our business, financial condition or results of operations could be materially and adversely affected.
We may not be able to respond to these competitive pressures or implement new technologies on a timely basis or at an acceptable cost.
Most recently, at COP28, nearly 200 countries, including the United States, agreed to transition away from fossil fuels while accelerating action in this decade to achieve net zero greenhouse gas emissions by 2050. In addition, various states and local governments have vowed to continue to enact regulations to achieve the goals of the Paris Agreement.
Pursuant to its obligations as a signatory to the Paris Agreement, the United States set a target to reduce its GHG emissions by 50-52% by the year 2030 as compared with 2005 levels. At COP28, nearly 200 countries, agreed to transition away from fossil fuels while accelerating action in this decade to achieve net zero greenhouse gas emissions by 2050.
In order to prepare our estimates, we must project production rates and timing of operating and development expenditures. We must also analyze available geological, geophysical, production and engineering data. The extent, quality and reliability of this data can vary.
We must also analyze available geological, geophysical, production and engineering data. The extent, quality and reliability of this data can vary. The process also requires economic assumptions about matters such as natural gas and oil prices, drilling and operating expenses, capital expenditures and availability of funds.
Restrictive covenants in our Revolving Credit Facility could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests. Restrictive covenants in our Revolving Credit Facility impose significant operating and financial restrictions on us and our subsidiaries.
Restrictive covenants in our Revolving Credit Facility impose significant operating and financial restrictions on us and our subsidiaries.
The listing of a species as either “threatened” or “endangered” under the federal Endangered Species Act could result in increased costs, new operating restrictions, or delays in our operations, which could adversely affect our results of operations and financial condition. The ESA and analogous state laws regulate activities that could have an adverse effect on threatened and endangered species.
The ESA and analogous state laws regulate activities that could have an adverse effect on threatened and endangered species.
Developing and producing oil and natural gas are costly and high-risk activities with many uncertainties that may result in a total loss of investment or otherwise adversely affect our business, financial condition, results of operations and cash flows. Our drilling activities are subject to many risks, including the risk that we will not discover commercially productive reservoirs.
Our drilling activities are subject to many risks, including the risk that we will not discover commercially productive reservoirs.
For further information, please see Note 16, “Commitments and Contingencies — Litigation and Environmental” of the Notes to Consolidated Financial Statements and “Part I — Item 3. Legal Proceedings” included in this Annual Report. We may be subject to increased permitting obligations and regulatory scrutiny as a result of the Incident.
We may be subject to increased permitting obligations and regulatory scrutiny as a result of the Incident.
Such climate change regulatory and legislative initiatives could have a material adverse effect on our business, financial condition and results of operations. 50 Table of Contents The $1 trillion legislative infrastructure package passed by Congress in November 2021 includes a number of climate-focused spending initiatives targeted at climate resilience, enhanced response and preparation for extreme weather events, and clean energy and transportation investments.
Such climate change regulatory and legislative initiatives could have a material adverse effect on our business, financial condition and results of operations. In August 2022, then-President Biden signed into law the Inflation Reduction Act of 2022.
Removed
A further or extended decline in commodity prices could materially and adversely affect our business, results of operations and financial condition.
Added
Our Revolving Credit Facility also requires us to comply with certain financial maintenance covenants as discussed above. A breach of any of these covenants could result in a default under our Revolving Credit Facility.
Removed
Inflation has also resulted in higher interest rates in the United States, which could increase our cost of debt borrowing in the future. 38 Table of Contents A pandemic, epidemic or outbreak of an infectious disease, may materially adversely affect our business.
Added
Our hedging strategy may not effectively mitigate the impact of commodity price volatility from our cash flows, and our hedging activities could result in cash losses and may limit potential gains.
Removed
The global or national outbreak of an infectious disease, such as the COVID-19 pandemic that began in 2020, has previously and may in the future cause disruptions to our business and operational plans, which may include (i) shortages of employees, (ii) unavailability of contractors and subcontractors, (iii) interruption of supplies from third parties upon which we rely, (iv) recommendations of, or restrictions imposed by, government and health authorities, including quarantines, and (v) restrictions that we and our contractors and subcontractors impose, including curtailment or shutting in of production, to ensure the safety of employees and others.
Added
These discounts, if significant, could reduce our cash flows and adversely affect our results of operations and financial condition. 42 Table of Contents Our estimated reserves and future production rates are based on many assumptions that may turn out to be inaccurate.
Removed
While it is not possible to predict their extent or duration, these disruptions may have a material adverse effect on our business, financial condition and results of operations.
Added
Many of our properties are in areas that may have been partially depleted or drained by offset wells. Many of our properties are in areas that may have already been partially depleted or drained by earlier offset drilling.
Removed
Further, any such pandemic, epidemic or outbreak of infectious disease has previously and may in the future adversely impact the supply chain for equipment or services needed for our operations, including as a result of mandatory shutdowns and other pandemic-related measures implemented in locations where such equipment or services are manufactured or distributed.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe maintain an information security program that includes physical, administrative and technical safeguards, and we maintain plans and procedures whose objective is to help us prevent while timely and effectively responding to cybersecurity threats or incidents.
Biggest changeWe maintain an information security program that includes physical, administrative and technical safeguards, and we maintain plans and procedures whose objective is to help us prevent, while timely and effectively responding to, cybersecurity threats or incidents, including those from third-party service providers who have access to our systems, data or are critical to our continued business operations.
The Nominating & Governance Committee of our Board of Directors, which is comprised entirely of independent directors, has primary responsibility for oversight of the Company’s initiatives, policies and performance regarding risk management matters, including information security, cybersecurity, business continuity and data protection and privacy.
The Nominating & Governance Committee, which is comprised entirely of independent directors, has primary responsibility for oversight of the Company’s initiatives, policies and performance regarding risk management matters, including information security, cybersecurity, business continuity and data protection and privacy.
The Nominating & Governance Committee and members of senior management brief the entire board, as necessary, on cybersecurity matters discussed during committee meetings. 58 Table of Contents As of the date of this Annual Report, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect us.
The Nominating & Governance Committee and members of senior management brief the entire board, as necessary, on cybersecurity matters discussed during committee meetings. 63 Table of Contents While some of our third-party service providers have experienced cybersecurity incidents and have experienced threats to their data and systems, as of the date of this Annual Report, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect us.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor additional information regarding legal proceedings, see Note 16, “Commitments and Contingencies — Litigation and Environmental” of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report and “Part II – Item 1A. Risk Factors — Risks Related to the Beta Pipeline Incident” which are incorporated herein by reference. ITEM 4.
Biggest changeFor additional information regarding legal proceedings, see Note 18, “Commitments and Contingencies — Litigation and Environmental” of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report and “Part II – Item 1A.
We are not aware of any other litigation, pending or threatened, that we believe will have a material adverse effect on our financial position, results of operations or cash flows. The Company accrued $3.1 million at December 31, 2023, in regard to our litigation and legal proceedings.
We are not aware of any litigation, pending or threatened, that we believe will have a material adverse effect on our financial position, results of operations or cash flows outside of what has been disclosed for the Incident. The Company accrued $1.1 million at December 31, 2024, in regard to our litigation and legal proceedings related to the Incident.
Removed
MINE SAFETY DISCLOSURES Not applicable. ​ 59 Table of Contents PART II
Added
Risk Factors — Risks Related to our Business — We may be subject to increased permitting obligations and regulatory scrutiny as a result of the Incident” which are incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 64 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 59 ​ PART II ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 60 Item 6. Reserved 60 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 61
Biggest changeItem 4. Mine Safety Disclosures 64 ​ PART II ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 65 Item 6. Reserved 65 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 66 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 82 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following sets forth information with respect to the Company’s repurchases of shares of its common stock during the fourth quarter of 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Approximate Dollar ​ ​ ​ ​ ​ ​ Shares Purchased as Value of Shares That ​ ​ ​ ​ ​ ​ Part of Publicly May Yet Be ​ Total Number of Average Price Announced Plans Purchased Under the Period Shares Purchased Paid per Share or Programs Plans or Programs (1) ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) Common Shares Repurchased (1) ​ October 1, 2023 - October 31, 2023 11,097 ​ $ 7.35 — n/a November 1, 2023 -November 30, 2023 — ​ $ — — n/a December 1, 2023 - December 31, 2023 26,409 ​ $ 6.16 — n/a (1) Common shares are generally net-settled by shareholders to cover the required withholding tax upon vesting.
Biggest changeIssuer Purchases of Equity Securities The following sets forth information with respect to the Company’s repurchases of shares of its Common Stock during the fourth quarter of 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Approximate Dollar ​ ​ ​ ​ ​ ​ Shares Purchased as Value of Shares That ​ ​ ​ ​ ​ ​ Part of Publicly May Yet Be ​ Total Number of Average Price Announced Plans Purchased Under the Period Shares Purchased Paid per Share or Programs Plans or Programs (1) ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) Common Shares Repurchased (1) ​ October 1, 2024 - October 31, 2024 2,000 ​ $ 6.66 — n/a November 1, 2024 - November 30, 2024 — ​ $ — — n/a December 1, 2024 - December 31, 2024 — ​ $ — — n/a (1) Common shares are generally net-settled by shareholders to cover the required withholding tax upon vesting.
Future dividends, if any, are subject to the terms of our Revolving Credit Facility and discretionary approval by the board of directors. Securities Authorized for Issuance Under Equity Compensation Plan See the information incorporated by reference in “Item 12.
Future dividends, if any, are subject to the terms of our Revolving Credit Facility and discretionary approval by the Board. Securities Authorized for Issuance Under Equity Compensation Plan See the information incorporated by reference in “Item 12.
The Company repurchased the remaining vesting shares on the vesting date at current market price. See Note 11, “Equity-based Awards” of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report, which is incorporated herein by reference.
The Company repurchased the remaining vesting shares on the vesting date at current market price. See Note 12, “Equity-based Awards” of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report, which is incorporated herein by reference.
As of February 28, 2024, we had twenty-three record holders of our common stock, based on information provided by our transfer agent. Dividends Policy While we may decide to pay cash dividends in the future, we have not paid, nor do we currently intend to pay, any cash dividends on our common stock.
As of February 28, 2025, we had twenty-one record holders of our Common Stock, based on information provided by our transfer agent. Dividends Policy While we may decide to pay cash dividends in the future, we have not paid, nor do we currently intend to pay, any cash dividends on our Common Stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the NYSE under the trading symbol “AMPY” and has been trading since August 7, 2019. As of February 28, 2024, we had 39,470,258 shares of our common stock outstanding.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock is listed on the NYSE under the trading symbol “AMPY” and has been trading since August 7, 2019. As of February 28, 2025, we had 40,332,937 shares of our Common Stock outstanding.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following tables present a reconciliation of the Company’s net income (loss) and cash flows operating activities to Adjusted EBITDA, our most directly comparable GAAP financial measures, for each of the periods indicated. 70 Table of Contents Reconciliation of Net Income (Loss) to Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, ​ 2023 2022 ​ (In thousands) Net income (loss) ​ $ 392,750 ​ $ 57,875 Interest expense, net ​ 17,719 ​ 14,101 Income tax expense (benefit) - current ​ ​ 4,817 ​ ​ 111 Income tax expense (benefit) - deferred ​ (253,796) ​ — DD&A ​ 28,004 ​ 23,950 Accretion of AROs ​ 7,951 ​ 7,081 Losses (gains) on commodity derivative instruments ​ (40,343) ​ 106,937 Cash settlements (paid) received on expired commodity derivative instruments ​ (8,273) ​ (148,239) Amortization of gain associated with terminated commodity derivatives ​ ​ 658 ​ ​ — Pipeline incident loss ​ 19,981 ​ 11,277 Pipeline incident settlement ​ — ​ 12,000 Litigation settlement ​ ​ (84,875) ​ ​ — Share-based compensation expense ​ 5,280 ​ 3,086 Loss on settlement of AROs ​ 1,003 ​ 908 Exploration costs ​ 57 ​ 57 Acquisition and divestiture related expenses ​ 219 ​ 41 Bad debt expense ​ 98 ​ 1 LOPI - timing difference ​ ​ (4,636) ​ ​ 4,636 Other ​ ​ 1,418 ​ ​ — Adjusted EBITDA ​ $ 88,032 ​ $ 93,822 ​ Reconciliation of Net Cash from Operating Activities to Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2023 2022 ​ ​ (In thousands) Net cash provided by operating activities ​ $ 141,590 ​ $ 64,485 Changes in working capital ​ (8,517) ​ (14,812) Interest expense, net ​ 17,719 ​ 14,101 Pipeline incident loss ​ 19,981 ​ 11,277 Pipeline incident settlement ​ — ​ 12,000 Litigation settlement ​ ​ (84,875) ​ — Income tax expense (benefit) - current ​ 4,817 ​ 111 Amortization and write-off of deferred financing fees ​ (1,980) ​ (649) Exploration costs ​ 57 ​ 57 Cash settlements paid (received) on terminated derivatives ​ ​ (658) ​ ​ — Amortization of gain associated with terminated commodity derivatives ​ ​ 658 ​ ​ — Plugging and abandonment cost ​ 2,239 ​ 1,829 Acquisition and divestiture related expenses ​ 219 ​ 41 LOPI - timing difference ​ ​ (4,636) ​ ​ 4,636 Gain (loss) on interest rate swaps ​ — ​ 935 Cash settlements paid (received) on interest rate swaps ​ — ​ (311) Other ​ 1,418 ​ 122 Adjusted EBITDA ​ $ 88,032 ​ $ 93,822 ​ 71 Table of Contents Liquidity and Capital Resources Overview .
Biggest change(3) The federal statutory rates were utilized for all periods presented. ​ Reconciliation of Net Income (Loss) to Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, ​ 2024 2023 ​ (In thousands) Net income (loss) ​ $ 12,946 ​ $ 392,750 Interest expense, net ​ 14,599 ​ 17,719 Income tax expense (benefit) - current ​ ​ 232 ​ ​ 4,817 Income tax expense (benefit) - deferred ​ 2,196 ​ (253,796) DD&A ​ 32,586 ​ 28,004 Accretion of AROs ​ 8,438 ​ 7,951 Losses (gains) on commodity derivative instruments ​ 2,047 ​ (40,343) Cash settlements (paid) received on expired commodity derivative instruments ​ 17,617 ​ (8,273) Amortization of gain associated with terminated commodity derivatives ​ ​ 159 ​ ​ 658 Pipeline incident loss ​ 3,859 ​ 19,981 (Gain) loss on sale of properties ​ (1,367) ​ — Share-based compensation expense ​ 6,799 ​ 5,280 Acquisition and divestiture related expenses ​ 1,633 ​ 219 Litigation settlement ​ ​ — ​ ​ (84,875) Loss on settlement of AROs ​ 470 ​ 1,003 Exploration costs ​ 61 ​ 57 Bad debt expense ​ 80 ​ 98 LOPI - timing difference ​ ​ — ​ ​ (4,636) Other ​ ​ 686 ​ ​ 1,418 Adjusted EBITDA (1) ​ $ 103,041 ​ $ 88,032 ​ (1) Adjusted EBITDA includes a revenue suspense release of $8.4 million for the year ended December 31, 2024.
Net gains on commodity derivative instruments of $40.3 million were recognized for the year ended December 31, 2023, consisting of a $47.9 million increase in the fair value of open positions, $0.7 million of cash settlements received on terminated derivative instruments partially offset by $8.3 million in cash settlements paid on expired positions.
Net gains on commodity derivative instruments of $40.3 million were recognized for the year ended December 31, 2023, consisting of a $47.9 million increase in the fair value of open positions and $0.7 million of cash settlements received on terminated derivative instruments, partially offset by $8.3 million in cash settlements paid on expired positions.
We define Adjusted EBITDA as net income (loss): Plus: ● Interest expense, including gains or losses on interest rate derivative contracts; ● Income tax expense; ● DD&A; ● Impairment of goodwill and long-lived assets (including oil and natural gas properties); ● Accretion of asset retirement obligations (“AROs”); ● Loss on commodity derivative instruments; ● Cash settlements received on expired commodity derivative instruments; ● Losses on sale of assets and other, net; 69 Table of Contents ● Share-based compensation expenses; ● Exploration costs; ● Acquisition and divestiture related expenses; ● Amortization of gain associated with terminated commodity derivatives; ● Severance payments; ● Bad debt expense; and ● Other non-routine items that we deem appropriate.
We define Adjusted EBITDA as net income (loss): Plus: ● Interest expense, including gains or losses on interest rate derivative contracts; ● Income tax expense; ● DD&A; ● Impairment of goodwill and long-lived assets (including oil and natural gas properties); ● Accretion of asset retirement obligations (“AROs”); ● Loss on commodity derivative instruments; 76 Table of Contents ● Cash settlements received on expired commodity derivative instruments; ● Losses on sale of assets and other, net; ● Share-based compensation expenses; ● Exploration costs; ● Acquisition and divestiture related expenses; ● Amortization of gain associated with terminated commodity derivatives; ● Severance payments; ● Bad debt expense; and ● Other non-routine items that we deem appropriate.
The charts below detail the allocation of capital across our asset base and by investment type based on the midpoint of our 2024 capital expenditure range. ​ ​ ​ 2024 CAPEX by Investment ​ 2024 CAPEX by Area ​ As has been our historical practice, we will periodically review our capital expenditures throughout the year and may adjust the budget based on commodity prices and other factors.
The charts below detail the allocation of capital across our asset base and by investment type based on the midpoint of our 2025 capital expenditure range. ​ ​ 2025 CAPEX by Investment 2025 CAPEX by Area As has been our historical practice, we will periodically review our capital expenditures throughout the year and may adjust the budget based on commodity prices and other factors.
We anticipate funding our 2024 capital program from internally generated cash flow. Critical Accounting Policies and Estimates The methods, estimates and judgments we use in applying our critical accounting policies have a significant impact on the results we report in our Consolidated Financial Statements. We evaluate our estimates and judgments on an on-going basis.
We anticipate funding our 2025 capital program from internally generated cash flow. Critical Accounting Policies and Estimates The methods, estimates and judgments we use in applying our critical accounting policies have a significant impact on the results we report in our Consolidated Financial Statements. We evaluate our estimates and judgments on an on-going basis.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2022 (“ 2022 Form 10-K ”) filed with the SEC and is incorporated by reference into this Annual Report.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023 (“ 2023 Form 10-K ”) filed with the SEC and is incorporated by reference into this Annual Report.
Recently Issued Accounting Pronouncements For a discussion of recent accounting pronouncements that will affect us, see Note 2 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data.” ITEM 7A.
Recently Issued Accounting Pronouncements For a discussion of recent accounting pronouncements that will affect us, see Note 2 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data.”
The relative prices of oil and natural gas are determined by the factors impacting global and regional supply and demand dynamics, such as economic conditions, production levels, weather cycles and other events. In addition, realized prices are heavily influenced by product quality and location relative to consuming and refining markets. 61 Table of Contents Natural Gas .
The relative prices of oil and natural gas are determined by the factors impacting global and regional supply and demand dynamics, such as economic conditions, production levels, weather cycles and other events. In addition, realized prices are heavily influenced by product quality and location relative to consuming and refining markets. Natural Gas .
The current market conditions may also impact our ability to enter into future commodity derivative contracts. 62 Table of Contents Principal Components of Cost Structure ● Lease operating expense . These are the day-to-day costs incurred to maintain production of our natural gas, NGLs and oil.
The current market conditions may also impact our ability to enter into future commodity derivative contracts. Principal Components of Cost Structure ● Lease operating expense . These are the day-to-day costs incurred to maintain production of our natural gas, NGLs and oil.
Future events and circumstances currently unknown to us could require future impairments to our properties and materially change the carrying value of our properties. 64 Table of Contents Oil and Natural Gas Reserves . Proved oil and natural gas reserves are estimated in accordance with the rules established by the SEC and FASB.
Future events and circumstances currently unknown to us could require future impairments to our properties and materially change the carrying value of our properties. Oil and Natural Gas Reserves . Proved oil and natural gas reserves are estimated in accordance with the rules established by the SEC and FASB.
For the year ended December 31, 2022 compared to the year ended December 31, 2021 Information related to the comparison of our discussion of the results of operations for the year ended December 31, 2022, compared to the year ended December 31, 2021, is included in “Item 7.
For the year ended December 31, 2023 compared to the year ended December 31, 2022 Information related to the comparison of our discussion of the results of operations for the year ended December 31, 2023, compared to the year ended December 31, 2022, is included in “Item 7.
For the year ended December 31, 2022 compared to the year ended December 31, 2021 Information related to the comparison of our discussion of the cash flows for the year ended December 31, 2022 compared to the year ended December 31, 2021, is included in “Item 7.
For the year ended December 31, 2023 compared to the year ended December 31, 2022 Information related to the comparison of our discussion of the cash flows for the year ended December 31, 2023 compared to the year ended December 31, 2022, is included in “Item 7.
Production Volumes Production volumes directly impact our results of operations. For more information about our volumes, see “— Results of Operations” below. Realized Prices on the Sale of Oil and Natural Gas We market our oil and natural gas production to a variety of purchasers based on regional pricing.
For more information about our volumes, see “— Results of Operations” below. Realized Prices on the Sale of Oil and Natural Gas We market our oil and natural gas production to a variety of purchasers based on regional pricing.
Current income tax (expense) benefit was ($4.8) million and ($0.1) million for the year ended December 31, 2023 and 2022, respectively. See additional information discussed in Note 17 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
See additional information discussed in Note 17 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report. Current income tax (expense) benefit was ($0.2) million and ($4.8) million for the year ended December 31, 2024 and 2023, respectively.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” of our 2022 Form 10-K filed with the SEC and is incorporated by reference into this Annual Report. Capital Requirements See “— Outlook” for additional information regarding our capital spending program for 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” of our 2023 Form 10-K filed with the SEC and is incorporated by reference into this Annual Report. Capital Requirements See “— Outlook” for additional information regarding our capital spending program for 2025.
Business Environment and Operational Focus We use a variety of financial and operational metrics to assess the performance of our oil and natural gas operations, including: (i) production volumes; (ii) realized prices on the sale of our production; (iii) cash settlements on our commodity derivatives; (iv) lease operating expense; (v) gathering, processing and transportation; (vi) general and administrative expense; and (vii) Adjusted EBITDA.
Business Environment and Operational Focus We use a variety of financial and operational metrics to assess the performance of our oil and natural gas operations, including: (i) production volumes; (ii) realized prices on the sale of our production; (iii) cash settlements on our commodity derivatives; (iv) lease operating expense; (v) gathering, processing and transportation; (vi) general and administrative expense; and (vii) Adjusted EBITDA. 68 Table of Contents Production Volumes Production volumes directly impact our results of operations.
Based on our current oil and natural gas price expectations, we believe our cash flows provided by operating activities and availability under our Revolving Credit Facility will provide us with the financial flexibility necessary to meet our cash requirements, including normal operating needs, and to pursue our currently planned 2024 development activities.
Prior to the closing of the Mergers, based on our current oil and natural gas price expectations, we believe our cash flows provided by operating activities and availability under our Revolving Credit Facility will provide us with the financial flexibility necessary to meet our cash requirements, including normal operating needs, and to pursue our currently planned 2025 development activities.
Debt Agreements Revolving Credit Facility . On July 31, 2023, OLLC, as borrower, entered into the Revolving Credit Facility.
On July 31, 2023, OLLC, as borrower, entered into the Revolving Credit Facility.
Pipeline incident loss was $20.0 million and $11.3 million for the year ended December 31, 2023 and 2022. The $20.0 million reflects certain legal defense and regulatory costs associated with the Incident that are not expected to be recovered under an insurance policy. See Note 15 of the Notes to Consolidated Financial Statements included under “Item 8.
Pipeline incident loss was $3.9 million and $20.0 million for the year ended December 31, 2024 and 2023. The $3.9 million reflects certain legal defense, loss load and regulatory costs associated with the Incident that are not expected to be recovered under an insurance policy. See Note 17 of the Notes to Consolidated Financial Statements included under “Item 8.
The oil produced from our onshore properties is a combination of sweet and sour oil, varying by location. This oil is typically sold at the NYMEX-WTI price, adjusted for quality and transportation differential, depending primarily on location and purchaser. The oil produced from our Beta properties is heavy and sour oil.
The oil produced from our onshore properties is a combination of sweet and sour oil, which varies by location. This oil is typically sold at the NYMEX-WTI price, adjusted for quality and transportation differential, depending primarily on location and purchaser.
These are costs incurred to deliver production of our natural gas, NGLs and oil to the market. Cost levels of these expenses can vary based on the volume of natural gas, NGLs and oil production. ● Taxes other than income . These consist of production, ad valorem and franchise taxes.
These are costs incurred to deliver production of our natural gas, NGLs and oil to the market. Cost levels of these expenses can vary based on the volume of natural gas, NGLs and oil production. ● Taxes other than income . These consist of production, ad valorem, NOx credits, waste emission charges and franchise taxes.
Adjusted EBITDA We include in this report the non-GAAP financial measure Adjusted EBITDA and provide our calculation of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net cash flow from operating activities, our most directly comparable financial measure calculated and presented in accordance with GAAP.
Non-GAAP Financial Measures We include in this report the non-GAAP financial measures for Adjusted Net Income (Loss) and Adjusted EBITDA and provide our reconciliation of net income (loss) to Adjusted Net Income (Loss) and a reconciliation of net cash flow from operating activities to Adjusted EBITDA, our most directly comparable financial measure calculated and presented in accordance with GAAP.
We cannot assure you that operations and other needed capital will be available on acceptable terms, or at all. We anticipate funding our 2024 capital program from internally generated cash flow but retain the flexibility to utilize borrowings under our Revolving Credit Facility, and/or to access the debt and equity capital markets.
We cannot assure you that operations and other needed capital will be available on acceptable terms, or at all. We anticipate funding our 2025 capital program from internally generated cash flow but retain the flexibility to utilize borrowings under debt facilities available to us, and/or to access the debt and equity capital markets.
Key drivers of net operating cash flows are commodity prices, production volumes, operating costs and the settlement received related to the Incident. Net cash provided by operating activities was $141.6 million and $64.5 million for the year ended December 31, 2023 and 2022, respectively.
Key drivers of net operating cash flows are commodity prices, production volumes, operating costs and the settlement received related to the Incident. Net cash provided by operating activities was $51.3 million and $141.6 million for the year ended December 31, 2024 and 2023, respectively.
Most of our oil and natural gas properties are located in large, mature oil and natural gas reservoirs. Production and Operation Update Total production for the Company in 2023 was composed of approximately 37% oil, 45% natural gas and 18% NGLs compared to 31% oil, 51% natural gas and 18% NGLs in 2022.
Most of our oil and natural gas properties are located in large, mature oil and natural gas reservoirs. Production and Operation Update Total production for the Company in 2024 was composed of approximately 43% oil, 39% natural gas and 18% NGLs compared to 37% oil, 45% natural gas and 18% NGLs in 2023.
Financial Statements and Supplementary Data” of this Annual Report for additional information. Material Cash Requirements Contractual commitments. We have contractual commitments under our debt agreements, including interest payments and principal payments. See Note 8 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report for additional information. Lease Obligations.
For additional information regarding our Revolving Credit Facility, see Note 9 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report for additional information. Material Cash Requirements Contractual commitments. We have contractual commitments under our debt agreements, including interest payments and principal payments.
Among other things, there are two characteristics that commonly drive quality differentials: (1) the oil’s American Petroleum Institute (“API”) gravity and (2) the oil’s percentage of sulfur content by weight.
Among other things, there are two characteristics that commonly drive quality differentials: (1) the oil’s API gravity and (2) the oil’s percentage of sulfur content by weight.
Historically, we have financed a portion of our working capital requirements, capital development and acquisitions with borrowings under our Revolving Credit Facility. As a result, we incur substantial interest expense that is affected by both fluctuations in interest rates and financing decisions. We expect to continue to incur significant interest expense.
Historically, we have financed a portion of our working capital requirements, capital development and acquisitions with borrowings under our Revolving Credit Facility. We incur interest expense that is affected by both fluctuations in interest rates and financing decisions.
We are subject to the Texas margin tax for activities in the State of Texas. 63 Table of Contents Outlook Based on our current plans, our capital expenditure program for the full year 2024 is expected to be approximately $50.0 million to $60.0 million.
We are subject to the Texas margin tax for activities in the State of Texas. 70 Table of Contents Outlook Based on our current plans, our capital expenditure program for the full year 2025 is expected to be approximately $70.0 million to $80.0 million.
Net cash provided by operating activities for the year ended December 31, 2023 included $8.3 million of cash paid on expired derivative instruments and $0.7 million of cash received on terminated derivative instruments compared to $147.9 million of cash paid on expired derivative instruments for the year ended December 31, 2022.
Net cash provided by operating activities for the year ended December 31, 2024 included $17.6 million of cash received on expired derivative instruments and $0.8 million of cash received on terminated derivative instruments compared to $8.3 million of cash paid on expired derivative instruments and $0.7 million of cash received on terminated derivatives instruments for the year ended December 31, 2023.
Our working capital requirements are primarily driven by changes in accounts receivable and accounts payable as well as the classification of our debt outstanding. These changes are impacted by changes in the prices of commodities that we buy and sell.
Working capital is the amount by which current assets exceed current liabilities. Our working capital requirements are primarily driven by changes in accounts receivable and accounts payable as well as the classification of our debt outstanding. These changes are impacted by changes in the prices of commodities that we buy and sell.
We believe that existing cash and cash equivalents, any positive cash flows from operations and available borrowings under our Revolving Credit Facility will be sufficient to support working capital, capital expenditures and other cash requirements for at least the next 12 months and, based on our current expectations, for the foreseeable future thereafter. Impact of the Beta Pipeline Incident .
Further, if the Mergers are not completed, we believe that existing cash and cash equivalents, any positive cash flows from operations and available borrowings under our Revolving Credit Facility will be sufficient to support working capital, capital expenditures and other cash requirements for at least the next 12 months and, based on our current expectations, for the foreseeable future thereafter.
Financial Statements and Supplementary Data” of this Annual Report. 68 Table of Contents Interest expense, net was $17.7 million and $14.1 million for the year ended December 31, 2023 and 2022, respectively.
Financial Statements and Supplementary Data” of this Annual Report. Interest expense, net was $14.6 million and $17.7 million for the year ended December 31, 2024 and 2023, respectively.
In addition, the timing of payments received by our customers or paid to our suppliers can also cause fluctuations in working capital because we settle with most of our larger customers on a monthly basis and often near the end of the month.
In addition, the timing of payments received by our customers or paid to our suppliers can also cause fluctuations in working capital because we settle with most of our larger customers on a monthly basis and often near the end of the month. We expect that our future working capital requirements will be impacted by these same factors.
Oil, natural gas and NGL revenues were $288.3 million and $407.8 million for the year ended December 31, 2023 and 2022, respectively. Average net production volumes were approximately 20.5 MBoe/d and 20.7 MBoe/d for the year ended December 31, 2023 and 2022, respectively.
Oil, natural gas and NGL revenues were $283.0 million and $288.3 million for the year ended December 31, 2024 and 2023, respectively. Average net production volumes were approximately 19.5 MBoe/d and 20.5 MBoe/d for the year ended December 31, 2024 and 2023, respectively.
We use the asset and liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences of (1) temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements and (2) operating loss and tax credit carryforwards.
We use the asset and liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences of (1) temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements and (2) operating loss and tax credit carryforwards. 72 Table of Contents In assessing the carrying value of our net deferred tax assets, we consider the realizability of our deferred tax assets each reporting period.
The change in our oil production was primarily related to Beta restarting operations in April 2023. We had a decrease of 29% in oil and natural gas sales primarily due to lower realized commodity prices. Average realized sales price per Boe was $38.54 for 2023 compared to $54.02 for 2022.
The change in our oil production was primarily related to Beta restarting operations in April 2023 and the development of wells at Beta. We had a decrease of 2% in oil and natural gas sales primarily due to lower volumes. Average realized sales price per Boe was $39.61 for 2024 compared to $38.54 for 2023.
Gathering, processing and transportation expenses were $20.8 million and $29.1 million for the year ended December 31, 2023 and 2022, respectively. On a per Boe basis, gathering, processing and transportation expenses were $2.78 and $3.86 for the year ended December 31, 2023 and 2022, respectively.
Gathering, processing and transportation expenses were $18.4 million and $20.8 million for the year ended December 31, 2024 and 2023, respectively. On a per Boe basis, gathering, processing and transportation expenses were $2.58 and $2.78 for the year ended December 31, 2024 and 2023, respectively.
Financial Statements and Supplementary Data” contained herein. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, ​ 2023 2022 ​ (In thousands) Net cash provided by operating activities ​ $ 141,590 ​ $ 64,485 Net cash used in investing activities ​ (38,602) ​ (41,525) Net cash used in financing activities ​ (82,242) ​ (41,759) ​ 73 Table of Contents For the year ended December 31, 2023 compared to the year ended December 31, 2022 Operating Activities.
Financial Statements and Supplementary Data” contained herein. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, ​ 2024 2023 ​ (In thousands) Net cash provided by operating activities ​ $ 51,293 ​ $ 141,590 Net cash used in investing activities ​ (82,034) ​ (38,602) Net cash used in financing activities ​ 9,995 ​ (82,242) ​ 81 Table of Contents For the year ended December 31, 2024 compared to the year ended December 31, 2023 Operating Activities.
For the year ended December 31, 2023, we had net gains on commodity derivative instruments of $40.3 million compared to net losses of $106.9 million for the year ended December 31, 2022. Investing Activities.
For the year ended December 31, 2024, we had a net loss on commodity derivative instruments of $2.0 million compared to net gains of $40.3 million for the year ended December 31, 2023. Investing Activities.
Additionally, we may take advantage of opportunities to modify our commodity derivative portfolio to change the percentage of our hedged production volumes when circumstances suggest that it is prudent to do so.
We may, however, from time-to-time hedge more or less than this approximate range. Additionally, we may take advantage of opportunities to modify our commodity derivative portfolio to change the percentage of our hedged production volumes when circumstances suggest that it is prudent to do so.
The change in general and administrative expense is primarily related to (i) an increase of $2.1 million in salaries and other payroll benefits; (ii) an increase of $2.2 million in stock compensation expense; partially offset by (iii) a decrease in legal services of $0.9 million; and a decrease in professional services of $0.3 million.
The change in general and administrative expense is primarily related to (i) an increase of $1.5 million in stock compensation expense; (ii) an increase of $1.5 million in legal expense related to cost incurred with acquisitions and divestiture activities; and (iii) an increase of $0.4 million in office lease expense related to the early termination of our Oklahoma office lease partially offset by (i) a decrease of $0.3 million in salaries and other payroll benefits, and (ii) a decrease of $0.2 million in professional services.
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. Adjusted EBITDA is not a measure of net income or cash flows as determined by GAAP.
Adjusted Net Income (Loss) is not considered to be an alternative to net income (loss) reported in accordance with GAAP. Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies.
The decrease in gathering, processing and transportation expense was primarily driven by the expiration of the minimum volume commitment fee in East Texas/North Louisiana (November 2022) and Oklahoma (June 2023) and lower commodity prices. Taxes other than income were $21.3 million and $33.3 million for the year ended December 31, 2023 and 2022, respectively.
The decrease in gathering, processing and transportation expense was primarily driven by the expiration of the minimum volume commitment fee in Oklahoma (June 2023) and lower volumes. Taxes other than income were $20.9 million and $22.6 million for the year ended December 31, 2024 and 2023, respectively.
Our ability to finance our operations, including funding capital expenditures and acquisitions, to meet our indebtedness obligations, to refinance our indebtedness or to meet our collateral requirements will depend on our ability to generate cash in the future.
See “Revenue Payables in Suspense” discussion noted above for additional information. ​ Liquidity and Capital Resources Overview . Our ability to finance our operations, including funding capital expenditures and acquisitions, to meet our indebtedness obligations, to refinance our indebtedness or to meet our collateral requirements will depend on our ability to generate cash in the future.
We considered all available evidence, including cumulative historical losses (defined as pre-tax earnings as adjusted for permanent tax adjustment), scheduled reversal of deferred tax liabilities, projected future taxable income and available tax planning strategies. 65 Table of Contents We believe accounting for income taxes is a critical accounting estimate because the policies discussed above in assessing the carrying value of our net deferred tax assets require estimates and judgements about the impact of future events on our projected taxable income, the results of which can have a material impact on our Consolidated Financial Statements.
We believe accounting for income taxes is a critical accounting estimate because the policies discussed above in assessing the carrying value of our net deferred tax assets require estimates and judgements about the impact of future events on our projected taxable income, the results of which can have a material impact on our Consolidated Financial Statements.
The comparability of the results of operations among the periods presented below is impacted by the Incident and suspension of operations at our Beta properties. 66 Table of Contents The table below summarizes certain of the results of operations and period-to-period comparisons for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, ​ 2023 2022 ​ ($ In thousands) Oil and natural gas sales $ 288,271 ​ $ 407,761 Other revenues ​ 19,325 ​ ​ 50,695 Lease operating expense 139,587 ​ 131,675 Gathering, processing and transportation 20,808 ​ 29,110 Taxes other than income 21,348 ​ 33,308 Depreciation, depletion and amortization 28,004 ​ 23,950 General and administrative expense 32,984 ​ 30,164 Loss (gain) on commodity derivative instruments (40,343) ​ 106,937 Pipeline incident loss ​ 19,981 ​ ​ 11,277 Pipeline incident settlement ​ — ​ ​ 12,000 Interest expense, net 17,719 ​ 14,101 Litigation settlement 84,875 ​ — Income tax (expense) benefit - current ​ (4,817) ​ ​ (111) Income tax (expense) benefit - deferred 253,796 ​ — Net income (loss) 392,750 ​ 57,875 ​ ​ ​ ​ ​ ​ Oil and natural gas revenues: ​ Oil sales $ 205,663 ​ $ 212,522 NGL sales 29,432 ​ 47,398 Natural gas sales 53,176 ​ 147,841 Total oil and natural gas revenues $ 288,271 ​ $ 407,761 ​ ​ ​ ​ ​ ​ Production volumes: ​ Oil (MBbls) 2,773 ​ 2,327 NGLs (MBbls) 1,323 ​ 1,389 Natural gas (MMcf) 20,297 ​ 22,993 Total (MBoe) 7,479 ​ 7,548 Average net production (MBoe/d) 20.5 ​ 20.7 ​ ​ ​ ​ ​ ​ Average realized sales price (excluding commodity derivatives): ​ Oil (per Bbl) $ 74.17 ​ $ 91.34 NGL (per Bbl) 22.24 ​ 34.11 Natural gas (per Mcf) 2.62 ​ 6.43 Total (per Boe) $ 38.54 ​ $ 54.02 ​ ​ ​ ​ ​ ​ Average unit costs per Boe: ​ Lease operating expense $ 18.66 ​ $ 17.45 Gathering, processing and transportation 2.78 ​ 3.86 Taxes other than income 2.85 ​ 4.41 General and administrative expense 4.41 ​ 4.00 Depletion, depreciation and amortization 3.74 ​ 3.17 ​ For the year ended December 31, 2023 compared to the year ended December 31, 2022 Net income of $392.8 million and $57.9 million was recorded for the year ended December 31, 2023 and 2022, respectively.
The comparability of the results of operations among the periods presented below is impacted by the suspension of operations at our Beta properties for the first half of 2023. 73 Table of Contents The table below summarizes certain of the results of operations and period-to-period comparisons for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2024 2023 ​ ​ ($ In thousands) Oil and natural gas sales ​ $ 282,992 ​ $ 288,271 Other revenues ​ ​ 11,689 ​ ​ 19,325 Lease operating expense ​ 142,950 ​ 138,361 Gathering, processing and transportation ​ 18,427 ​ 20,808 Taxes other than income ​ 20,895 ​ 22,574 Depreciation, depletion and amortization ​ 32,586 ​ 28,004 General and administrative expense ​ 35,895 ​ 32,984 Loss (gain) on commodity derivative instruments ​ 2,047 ​ (40,343) Pipeline incident loss ​ ​ 3,859 ​ ​ 19,981 Interest expense, net ​ 14,599 ​ 17,719 Litigation settlement ​ — ​ 84,875 Income tax (expense) benefit - current ​ ​ (232) ​ ​ (4,817) Income tax (expense) benefit - deferred ​ (2,196) ​ 253,796 Net income (loss) ​ 12,946 ​ 392,750 ​ ​ ​ ​ ​ ​ ​ Oil and natural gas revenues: ​ ​ Oil sales ​ $ 220,380 ​ $ 205,663 NGL sales ​ 26,789 ​ 29,432 Natural gas sales ​ 35,823 ​ 53,176 Total oil and natural gas revenues ​ $ 282,992 ​ $ 288,271 ​ ​ ​ ​ ​ ​ ​ Production volumes: ​ ​ Oil (MBbls) ​ 3,060 ​ 2,773 NGLs (MBbls) ​ 1,278 ​ 1,323 Natural gas (MMcf) ​ 16,836 ​ 20,297 Total (MBoe) ​ 7,144 ​ 7,479 Average net production (MBoe/d) ​ 19.5 ​ 20.5 ​ ​ ​ ​ ​ ​ ​ Average realized sales price (excluding commodity derivatives): ​ ​ Oil (per Bbl) ​ $ 72.01 ​ $ 74.17 NGL (per Bbl) ​ 20.96 ​ 22.24 Natural gas (per Mcf) ​ 2.13 ​ 2.62 Total (per Boe) ​ $ 39.61 ​ $ 38.54 ​ ​ ​ ​ ​ ​ ​ Average unit costs per Boe: ​ ​ Lease operating expense ​ $ 20.01 ​ $ 18.50 Gathering, processing and transportation ​ 2.58 ​ 2.78 Taxes other than income ​ 2.92 ​ 3.02 General and administrative expense ​ 5.02 ​ 4.41 Depletion, depreciation and amortization ​ 4.56 ​ 3.74 ​ For the year ended December 31, 2024 compared to the year ended December 31, 2023 Net income of $12.9 million and $392.8 million was recorded for the year ended December 31, 2024 and 2023, respectively.
We are required to enter into commodity derivative contracts at times and on terms desired to maintain a portfolio of commodity derivative contracts covering at least 50%−75% of our estimated production from proved developed producing reserves over a one-to-three-year period at any given point of time. We may, however, from time-to-time hedge more or less than this approximate range.
The covenants in our Revolving Credit Facility require us to enter into commodity derivative contracts at times and on terms desired to maintain a portfolio of commodity derivative contracts covering at least 50%−75% of our estimated production from proved developed producing reserves over a one-to-three-year period at any given point of time.
The following table shows the low and high commodity future index prices for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ High Low For the Year Ended December 31, 2023: ​ ​ NYMEX-WTI oil future price range per Bbl ​ $ 93.68 ​ $ 66.74 NYMEX-Henry Hub natural gas future price range per MMBtu ​ $ 4.17 ​ $ 1.99 ICE Brent oil future price range per Bbl ​ $ 96.55 ​ $ 71.84 ​ Commodity Derivative Contracts .
The following table shows the low and high commodity future index prices for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ High Low For the Year Ended December 31, 2024: ​ ​ NYMEX-WTI oil future price range per Bbl ​ $ 86.91 ​ $ 65.75 NYMEX-Henry Hub natural gas future price range per MMBtu ​ $ 3.95 ​ $ 1.58 ICE Brent oil future price range per Bbl ​ $ 91.17 ​ $ 69.19 ​ Commodity Derivative Contracts .
For the year ended December 31, 2023, we paid $4.8 million in deferred financing costs under the Revolving Credit Facility.
We had net borrowings of $12.0 million for the year ended December 31, 2024, compared to net repayments of $75.0 million for the year ended December 31, 2023, under our Revolving Credit Facility. For the year ended December 31, 2023, we paid $4.8 million in deferred financing costs under the Revolving Credit Facility.
The cash flows for the years ended December 31, 2023 and 2022, have been derived from our Consolidated Financial Statements. For information regarding the individual components of our cash flow amounts, see the Statements of Consolidated Cash Flows included under “Item 8.
For information regarding the individual components of our cash flow amounts, see the Statements of Consolidated Cash Flows included under “Item 8.
Net cash used in investing activities for the year ended December 31, 2023 was $38.6 million, of which $30.7 million was used for additions to oil and natural gas properties. Net cash used in investing activities for the year ended December 31, 2022, was $41.5 million, of which $34.8 million was used for additions to oil and natural gas properties.
Net cash used in investing activities for the year ended December 31, 2023, was $38.6 million, of which $30.7 million was used for additions to oil and natural gas properties. For the year ended December 31, 2024, in East Texas we sold some undeveloped acreage recognizing a gain of $1.4 million.
The factors used to determine fair value include, but are not limited to, estimates of proved and probable reserves, future commodity prices, the timing of future production and capital expenditures and a discount rate commensurate with the risk reflective of the lives remaining for the respective oil and gas properties.
The factors used to determine fair value include, but are not limited to, estimates of proved and probable reserves, future commodity prices, the timing of future production and capital expenditures and a discount rate commensurate with the risk reflective of the lives remaining for the respective oil and gas properties. 71 Table of Contents We believe accounting for oil and natural gas properties is a critical accounting estimate because the policies discussed above impact the carrying value of our properties and involve significant judgments about the impact of future events on our estimated cash flows.
Production volumes decreased to 20.5 MBoe/d in 2023 from 20.7 MBoe/d in 2022, and the average realized sales price decreased to $38.54 per Boe in 2023 from $54.02 per Boe in 2022. The changes in production and average realized sales price were primarily related to decreased realized commodity prices.
Production volumes decreased to 19.5 MBoe/d in 2024 from 20.5 MBoe/d in 2023, and the average realized sales price increased to $39.61 per Boe in 2024 from $38.54 per Boe in 2023.
The change resulted from an increase in interest expense due to higher interest rates on our Revolving Credit Facility and an increase in the amortization and write-off of deferred financing costs. Average outstanding borrowings under our Revolving Credit Facility were $138.9 million and $215.1 million for the year ended December 31, 2023 and 2022, respectively.
The change resulted from lower outstanding borrowings and amortization and write-off of deferred issuance costs. 75 Table of Contents Average outstanding borrowings under our Revolving Credit Facility were $120.9 million and $138.9 million for the year ended December 31, 2024 and 2023, respectively.
At December 31, 2023, the aggregate principal amount of loans outstanding under the Revolving Credit Facility was $115.0 million. As of December 31, 2023, we had approximately $20.0 million of available borrowings under our Revolving Credit Facility.
At December 31, 2024, the aggregate principal amount of loans outstanding under the Revolving Credit Facility was $127.0 million.
We have a payment plan to pay our federal fines over a period of three years. We are scheduled to pay $2.0 million in 2024 and $1.1 million in 2025. Cash Flows from Operating, Investing and Financing Activities The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated.
We are scheduled to pay $1.1 million in September 2025. Cash Flows from Operating, Investing and Financing Activities The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated. The cash flows for the years ended December 31, 2024 and 2023, have been derived from our Consolidated Financial Statements.
As of December 31, 2023, our future commitments under this agreement were $15.8 million per year for years 2024 through 2033. See Note 16 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report for additional information. Fines .
As of December 31, 2024, our future commitments under these contracts were $2.1 million in 2025, $1.4 million in 2026, $1.0 million in 2027, $0.7 million in 2028 and $1.1 million thereafter. See Note 13 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report for additional information.
See additional information discussed in Note 17 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Starting in the first quarter of 2023, we achieved three years of cumulative book income, which allowed the release of the valuation allowance. See additional information discussed in Note 19 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Lease operating expense was $139.6 million and $131.7 million for the year ended December 31, 2023 and 2022, respectively. The change in lease operating expense was primarily driven by higher base lease operating costs, with Beta restarting operations in April 2023, offset by a credit received for transportation costs.
Lease operating expense was $143.0 million and $138.4 million for the year ended December 31, 2024 and 2023, respectively. The change in lease operating expense was primarily driven by higher base lease operating costs due to Beta being online for a full year in 2024 compared to nine months for 2023, offset by a credit received for transportation costs.
Litigation settlement was $84.9 million for the year ended December 31, 2023, related to the settlement with the shipping companies and the containerships whose anchors struck the Company’s pipeline. See additional information discussed in Note 15 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
See additional information discussed in Note 19 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report. Deferred income tax benefit (expense) was ($2.2) million and $253.8 million for the year ended December 31, 2024 and 2023, respectively.
Our total capital expenditures were approximately $33.7 million for the year ended December 31, 2023, which were primarily related to capital workovers and capital facilities expenditures located in Beta, Oklahoma, Bairoil and non-operated drilling activity in Eagle Ford. Working Capital. Working capital is the amount by which current assets exceed current liabilities.
Our total capital expenditures were approximately $70.6 million for the year ended December 31, 2024, which were primarily related to the development program at Beta, capital workovers and facilities upgrades at Beta and in Oklahoma and non-operated drilling and completion activities in East Texas and the Eagle Ford. Working Capital.
The change in taxes other than income is due to a decrease of $12.2 million in production taxes as a result of lower commodity prices offset by an increase of $0.2 million for ad valorem tax. On a per Boe basis, taxes other than income were $2.85 and $4.41 for the year ended December 31, 2023 and 2022, respectively.
The change in taxes other than income is due to a decrease of $1.6 million in production tax and a decrease in ad valorem tax of $1.3 million, partially offset by an increase in emission charges of $1.2 million. DD&A expense was $32.6 million and $28.0 million for the year ended December 31, 2024 and 2023, respectively.
The change in taxes other than income on a per Boe basis was primarily due to lower commodity prices. DD&A expense was $28.0 million and $24.0 million for the year ended December 31, 2023 and 2022, respectively. The change in DD&A expense was primarily driven by the restart of production at Beta.
The change in DD&A expense was primarily driven by the restart of production at Beta. General and administrative expense was $35.9 million and $33.0 million for the year ended December 31, 2024 and 2023, respectively.
As of December 31, 2023, we were in compliance with all the financial (current ratio and total leverage ratio) and non-financial covenants associated with our Revolving Credit Facility. For additional information regarding our Revolving Credit Facility, see Note 8 of the Notes to Consolidated Financial Statements included under “Item 8.
As of December 31, 2024, we had approximately $18.0 million of available borrowings under our Revolving Credit Facility. As of December 31, 2024, we were in compliance with all the financial (current ratio and total leverage ratio) and non-financial covenants associated with our Revolving Credit Facility.
On a per Boe basis, lease operating expense was $18.66 and $17.45 for the year ended December 31, 2023 and 2022, respectively. The change in lease operating expense on a per Boe basis was mainly due to higher aggregate costs with Beta restarting operations and lower production.
On a per Boe basis, lease operating expense was $20.01 and $18.50 for the year ended December 31, 2024 and 2023, respectively. The change in lease operating expense on a per Boe basis was mainly due to an additional three months of costs associated with Beta being online for the full year in 2024 compared to nine months in 2023.
We have reversed the entire valuation allowance on our net deferred tax assets during 2023, recording an income tax benefit of $249.0 million for the year ended December 31, 2023. In future periods, we may demonstrate cumulative historical losses for the previous three fiscal years, which could significantly impact our need for a valuation allowance.
In future periods, we may demonstrate cumulative historical losses for the previous three fiscal years, which could significantly impact our need for a valuation allowance. Any increase in the valuation allowance would increase our income tax expense in the Consolidated Statements of Operations.
We expect that our future working capital requirements will be impacted by these same factors. 72 Table of Contents As of December 31, 2023, we had a working capital deficit (excluding commodity derivatives) of $15.9 million primarily as the result of (i) an accrued liabilities balance of $50.9 million, (ii) an accounts payable balance of $23.6 million, and (iii) a revenue payable balance of $21.9 million, less (i) an accounts receivable balance of $39.1 million, (ii) prepaid expenses and other current assets balance of $20.7 million and (iii) cash on hand of $20.7 million.
As of December 31, 2024, we had a working capital deficit (excluding commodity derivatives) of $2.7 million primarily as the result of (i) an accrued liabilities balance of $43.4 million, (ii) an accounts payable balance of $13.2 million, and (iii) a revenue payable balance of $11.5 million, less (i) an accounts receivable balance of $39.7 million and (ii) prepaid expenses and other current assets balance of $25.7 million. 80 Table of Contents Debt Agreements Revolving Credit Facility .
See Note 12 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report for additional information. Sinking fund payments. We have a funding requirement to fund a trust account to comply with supplemental regulatory bonding requirements related to our decommissioning obligations for our Beta production facilities.
See Note 9 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report for additional information. Lease Obligations. We have operating leases for office and warehouse spaces, office equipment, compressors and surface rentals related to our business obligations.
Net losses on commodity derivative instruments of $106.9 million were recognized for the year ended December 31, 2022, consisting of a $41.3 million increase in the fair value of open positions and a decrease of $148.2 million of cash settlements paid on expired positions.
Net loss (gain) on commodity derivative instruments for the year ended December 31, 2024 was a loss of $2.0 million which consisted of a $20.5 million decrease in the fair value of open positions, partially offset by a $0.8 million of cash settlements received on terminated derivative instruments and $17.6 million in cash settlements received on expired positions.
Additions to restricted investments were $8.6 million for the year ended December 31, 2023 compared to $6.7 million for the year ended December 31, 2022. Financing Activities . We had net repayments of $75.0 million and $40.0 million under our Revolving Credit Facility and Prior Revolving Credit Facility for the year ended December 31, 2023 and 2022, respectively.
Additions to restricted investments were $10.1 million for the year ended December 31, 2024 compared to $8.6 million for the year ended December 31, 2023. Financing Activities .
The average realized sales price was $38.54 per Boe and $54.02 per Boe for the year ended December 31, 2023 and 2022, respectively. The decrease in average realized sales price was due to lower commodity prices. 67 Table of Contents Other revenues were $19.3 million and $50.7 million for the year ended December 31, 2023 and 2022, respectively.
Net sales for Beta were $84.8 million for the year ended December 31, 2024 compared to $51.1 million for the year ended December 31, 2023. 74 Table of Contents Other revenues were $11.7 million and $19.3 million for the year ended December 31, 2024 and 2023, respectively.
Oil produced from our Beta properties is currently sold based on refiners’ posted prices for California Midway-Sunset deliveries in Southern California, adjusted primarily for quality and a negotiated market differential. Price Volatility . In the past, oil and natural gas prices have been extremely volatile, and we expect this volatility to continue.
In the past, oil and natural gas prices have been extremely volatile, and we expect this volatility to continue.
Our total estimated proved reserves decreased to 98.1 MMBoe in 2023 compared to 124.0 MMBoe in 2022. The decrease is primarily due to lower commodity prices. As of December 31, 2023, we are the operator of record for properties containing 92% of our total estimated proved reserves.
Our total estimated proved reserves decreased to 93.0 MMBoe in 2024 compared to 98.1 MMBoe in 2023. The decrease was primarily due to changes in commodity prices and 2024 production roll off, partially offset by changes in development plans specifically related to Beta.
Deferred income tax benefit (expense) was $253.8 million for the year ended December 31, 2023. Starting in the first quarter of 2023, we achieved three years of cumulative income, which allowed the release of the valuation allowance. No deferred income tax benefit (expense) was recorded for the year ended December 31, 2022.
(2) In 2023, we achieved three years of cumulative book income which resulted in the release of our valuation allowance of $284.9 million.
Any increase in the valuation allowance would increase our income tax expense in the Consolidated Statements of Operations. Results of Operations The results of operations for the years ended December 31, 2023 and 2022 have been derived from our Consolidated Financial Statements.
Although we believe our assumptions, judgments and estimates are reasonable, changes in tax laws or our interpretation of tax laws and the resolution of any tax audits could significantly impact the amounts provided for income taxes in our Consolidated Financial Statements. Any increase in the valuation allowance would increase our income tax expense in the Consolidated Statements of Operations.
Removed
We believe accounting for oil and natural gas properties is a critical accounting estimate because the policies discussed above impact the carrying value of our properties and involve significant judgments about the impact of future events on our estimated cash flows.
Added
As of December 31, 2024, we are the operator of record for properties containing 92% of our total estimated proved reserves. Recent Developments East Texas Haynesville Monetization In December 2024, we sold certain rights, title and interest in assets located in East Texas to a third party. We recorded a gain of approximately $1.4 million.
Removed
In assessing the carrying value of our net deferred tax assets, we consider the realizability of our deferred tax assets each reporting period.
Added
In January 2025, we purchased and sold certain rights, title and interest in assets in East Texas from a third party, whereby we received net proceeds of $6.2 million.

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