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What changed in Amplify Energy Corp.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Amplify Energy Corp.'s 2024 and 2025 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 2025 report.

+454 added−582 removedSource: 10-K (2026-03-09) vs 10-K (2025-03-05)

Top changes in Amplify Energy Corp.'s 2025 10-K

454 paragraphs added · 582 removed · 301 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

112 edited+64 added−94 removed152 unchanged
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.
Biggest changeAs of the date of filing this Annual Report, we no longer operate in the Eagle Ford. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ ​ ​ ​ ​ Productive Wells Productive wells consist of producing wells and wells capable of production, including natural gas wells awaiting pipeline connections to commence deliveries and oil wells awaiting connection to production facilities.
(“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.
(“Amplify Energy,” “Amplify,” 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.
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.
In addition, in certain jurisdictions, 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.
Based on our current expectations of our cash flows, we believe that we can fund the drilling of our current PUD inventory and our expansions in the next five years from our cash flow from operations and borrowings under our Revolving Credit Facility. For a more detailed discussion of our liquidity position, see “Item 7.
Based on our current expectations of our cash flows, we believe that we can fund the drilling of our current PUD inventory and our expansions in the next five years from our cash flow from operations, cash on hand and borrowings under our Revolving Credit Facility. For a more detailed discussion of our liquidity position, see “Item 7.
Congress, federal agencies and the courts. The Company cannot predict the ultimate impact these proposals may have on its crude oil and natural gas operations, but the Company does not expect any such action to affect the Company differently than it will affect other gas or oil producers with which we compete.
Congress, federal agencies and the courts. The Company cannot predict the ultimate impact these proposals may have on its crude oil operations, but the Company does not expect any such action to affect the Company differently than it will affect other gas or oil producers with which we compete.
There is also increasing interest in nature-related matters beyond protected species, such as general biodiversity, which may similarly require us or our customers to incur costs or take other measures which may adversely impact our business or operations. 32 Table of Contents Occupational Safety and Health Act We are also subject to the requirements of the federal Occupational Safety and Health Act (“OSHA”) and comparable state laws that regulate the protection of the health and safety of employees.
There is also increasing interest in nature-related matters beyond protected species, such as general biodiversity, which may similarly require us or our customers to incur costs or take other measures which may adversely impact our business or operations. 31 Table of Contents Occupational Safety and Health Act We are also subject to the requirements of the federal Occupational Safety and Health Act (“OSHA”) and comparable state laws that regulate the protection of the health and safety of employees.
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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Commodity Derivative Contracts.” (2) 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.
The PHMSA has also issued a final rule applying safety regulations to certain rural low-stress hazardous liquid pipelines that were not covered previously by some of its safety regulations.
PHMSA has also issued a final rule applying safety regulations to certain rural low-stress hazardous liquid pipelines that were not covered previously by some of its safety regulations.
We strive to create a high-performing culture and positive work environment that allows us to attract and retain a diverse group of talented individuals who can foster the Company’s success.
We strive to create a high-performing culture and positive work environment that allows us to attract and retain a group of talented individuals who can foster the Company’s success.
Obtaining permits also has the potential to delay the development of oil and natural gas projects and increase our costs of development, which costs could be significant. We believe that we currently are in substantial compliance with all air emissions regulations and that we hold all necessary and valid construction and operating permits for our current operations.
Obtaining permits also has the potential to delay the development of oil projects and increase our costs of development, which costs could be significant. We believe that we currently are in substantial compliance with all air emissions regulations and that we hold all necessary and valid construction and operating permits for our current operations.
These laws and any implementing regulations provide for administrative, civil and criminal penalties for any unauthorized discharges of oil and other substances in reportable quantities and may impose substantial potential liability for the costs of removal, remediation and damages. Additionally, obtaining permits has the potential to delay the development of natural gas and oil projects.
These laws and any implementing regulations provide for administrative, civil and criminal penalties for any unauthorized discharges of oil and other substances in reportable quantities and may impose substantial potential liability for the costs of removal, remediation and damages. Additionally, obtaining permits has the potential to delay the development of oil projects.
Consequently, future implementation and enforcement of federal climate change rules remain uncertain at this time. 31 Table of Contents National Environmental Policy Act Oil and natural gas exploration and production activities on federal lands are subject to NEPA. NEPA requires federal agencies, including the U.S.
Consequently, future implementation and enforcement of federal climate change rules remain uncertain at this time. 30 Table of Contents National Environmental Policy Act Oil and natural gas exploration and production activities on federal lands are subject to NEPA. NEPA requires federal agencies, including the U.S.
Consequently, future implementation and enforcement of the final 2023 EPA rule and the final 2024 BLM rule remain uncertain at this time.
Consequently, future implementation and enforcement of the final 2024 EPA rule and the final 2024 BLM rule remain uncertain at this time.
The future of this rulemaking is uncertain. In April 2024, the U.S. FWS issued three final rules governing critical habitat designation and expanding protection options for species listed as threatened pursuant to the ESA.
The future of this rulemaking is uncertain. In April 2024, the U.S. FWS issued three final rules governing critical habitat designation and expanding protection options for species listed as threatened pursuant to the ESA. However, in April 2025, the U.S.
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.
PHMSA updates the maximum administrative civil penalties each year to account for inflation, and as of December 2025, the penalty limits are up to $272,926 per violation per day and up to $2,729,245 for a related series of violations.
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.
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.
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.
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. 36 Table of Contents The SEC maintains a website that contains reports, proxy and information statements, and other information regarding the Company at www.sec.gov.
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 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.
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.
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, 2025, the Company had 184 employees, none of whom were represented by labor unions or covered by any collective bargaining agreement.
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.
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 or entanglements in the Middle East and South America; 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.
We consider competitive market compensation paid by our peers and other companies comparable to us in size, geographic location and operations in order to ensure our compensation remains competitive and fulfills our goal of recruiting and retaining talented employees. Training and Development We are committed to the training and development of our employees.
We consider competitive market compensation paid by our peers and other companies comparable to us in size, geographic location and operations in order to ensure our compensation remains competitive and fulfills our goal of recruiting and retaining talented employees. 35 Table of Contents Training and Development We are committed to the training and development of our employees.
Under both the CEA and the EISA, fines for violations can be up to $1,000,000 per day per violation (subject to adjustment for inflation) and certain knowing or willful violations may also lead to a felony conviction. Additional proposals and proceedings that may affect the crude oil and natural gas industry are pending before the U.S.
Under both the CEA and the EISA, fines for violations can be up to $1,000,000 per day per violation (subject to adjustment for inflation) and certain knowing or willful violations may also lead to a felony conviction. 34 Table of Contents Additional proposals and proceedings that may affect the crude oil and natural gas industry are pending before the U.S.
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.
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. Inclusion We are committed to supporting an inclusive workplace and career development opportunities to attract and retain talented employees.
(4) Our estimated net proved reserves and related standardized measure were determined using 12-month trailing average oil and natural gas index prices, calculated as the unweighted arithmetic average for the first-day-of-the-month price for each month in effect as of the date of the estimate, without giving effect to derivative contracts, held constant throughout the life of the properties.
(3) Our estimated net proved reserves and related standardized measure were determined using 12-month trailing average oil index prices, calculated as the unweighted arithmetic average for the first-day-of-the-month price for each month in effect as of the date of the estimate, without giving effect to derivative contracts, held constant throughout the life of the properties.
Climate Change Regulation At the international level, the United States joined the international community at the United Nations Framework Convention on Climate Change 21st Conference of the Parties (“COP21”) in Paris, France in 2015, which resulted in an agreement intended to nationally determine their contributions and set GHG emission reduction goals every five years beginning in 2020.
Climate Change Regulation At the international level, the United States joined the international community at the United Nations Framework Convention on Climate Change 21st Conference of the Parties (“COP21”) in Paris, France in 2015, which resulted in an agreement intended to nationally determine their contributions and set greenhouse gas (“GHG”) emission reduction goals every five years beginning in 2020.
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.
In April 2024, BOEM published a final rule, effective June 2024, 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.
These prices were adjusted by lease for quality, transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the wellhead. ​ The data in the table above represents estimates only.
These prices were adjusted by lease for quality, transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the wellhead. 18 Table of Contents The data in the table above represents estimates only.
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.
Operations General As of December 31, 2025, the Company is the operator of record of properties containing 100% 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.
The EPA announced a final rule in December 2023, which, among other things, requires the phase out of routine flaring of natural gas from new oil wells and routine leak monitoring at all well sites and compressor stations.
The EPA announced a final rule in December 2023, later published in March 2024, which, among other things, requires the phase out of routine flaring of natural gas from new oil wells and routine leak monitoring at all well sites and compressor stations.
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.
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.
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.
None of our PUDs as of December 31, 2025 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, 2025, total PUDs increased by 2,719 MBoe.
Moreover, each state generally imposes a production or severance tax with respect to the production and sale of oil, natural gas and NGLs within its jurisdiction. 33 Table of Contents Sale and Transportation of Gas and Oil The Federal Energy Regulatory Commission (“FERC”) has jurisdiction over the construction and operations of interstate gas pipeline facilities and the rates, terms and conditions of service under which companies provide interstate transportation of gas, oil and other liquids by pipeline.
Moreover, each state generally imposes a production or severance tax with respect to the production and sale of oil, natural gas and NGLs within its jurisdiction. 32 Table of Contents Sale and Transportation of Gas and Oil The Federal Energy Regulatory Commission (“FERC”) has jurisdiction terms and conditions of service under which companies provide interstate transportation of gas, oil and other liquids by pipeline.
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.
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, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Major customers: ​ ​ ​ Phillips 66 ​ 28 % 33 % HF Sinclair Corporation (formerly: Sinclair Oil & Gas Company) 21 % 25 % Southwest Energy LP n/a % 10 % ​ 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.
New laws and regulations continue to be enacted, particularly at the state level, and the long-term trend of more expansive and stringent environmental legislation and regulations applied to the crude oil and natural gas industry could continue, resulting in increased costs of doing business and consequently affecting profitability.
New laws and regulations continue to be enacted, particularly at the state level, and the long-term trend of more expansive and stringent environmental legislation and regulations applied to the crude oil and natural gas industry could continue, which may result in increased costs of doing business and consequently affect profitability.
The emissions reported under the Greenhouse Gas Reporting Program will be the basis for any payments under the Methane Emissions Reduction Program. However, petitions for reconsideration to the EPA are pending and litigation in the D.C. Circuit has commenced.
The emissions reported under the Greenhouse Gas Reporting Program were set as the basis for any payments under the Methane Emissions Reduction Program. However, petitions for reconsideration to the EPA are pending and litigation in the D.C. Circuit has commenced.
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.
This program required the EPA to impose a Waste Emissions Charge (“WEC”) 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 believe we have followed and continue to substantially follow applicable industry standard practices and legal and regulatory requirements for groundwater protection in our hydraulic fracturing operations, which are subject to supervision by state and federal regulators (including the U.S. Bureau of Land Management (the “BLM”) on federal acreage).
We believe we have followed and continue to substantially follow, where required and consistent with the standards previously reported, applicable industry standard practices and legal and regulatory requirements for groundwater protection in our previous hydraulic fracturing operations, which are subject to supervision by state and federal regulators (including the U.S. Bureau of Land Management (the “BLM”) on federal acreage).
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.
The Beta properties contained 24.3 MMBbls of estimated net proved oil reserves as of December 31, 2025 based on our reserve report and generated average net production of 3.7 MBoe/d for the three months ended December 31, 2025.
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 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.
Beta Approximately 20% of our estimated proved reserves as of December 31, 2024 and approximately 18% of our average daily net production for the three months ended December 31, 2024 were associated with the Beta field located in federal waters approximately 11 miles offshore from the Port of Long Beach, California.
Our Areas of Operation Beta Approximately 64% of our estimated proved reserves as of December 31, 2025 and approximately 56% of our average daily net production for the three months ended December 31, 2025 were associated with the Beta field located in federal waters approximately 11 miles offshore from the Port of Long Beach, California.
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.
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.
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.
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 certain climate-related information, including their Scopes 1, 2, and 3 GHG emissions, with third party assurance of such data, climate-related financial risks and related mitigation measures.
Our Bairoil properties contained 16.4 MMBbls of estimated net proved oil and NGLs reserves as of December 31, 2024 based on our reserve report and generated average net production of 3.2 MBoe/d for the three months ended December 31, 2024.
Our Bairoil properties contained 13.7 MMBbls of estimated net proved oil and NGLs reserves as of December 31, 2025 based on our reserve report and generated average net production of 2.9 MBoe/d for the three months ended December 31, 2025.
We intend 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 total proved developed producing reserves over a one-to-three-year period at any given point of time.
We intend to enter into commodity derivative contracts at times and on terms desired to maintain a portfolio of commodity derivative contracts covering at least 25% − 75%, depending on availability under the Revolving Credit Facility, of our estimated production from total proved developed producing reserves over a one-year period at any given point of time.
Such climate change regulatory and legislative initiatives could have a material adverse effect on our business, financial condition and results of operations. Moreover, any legislation or regulatory programs to reduce GHG emissions could increase the cost of consumption, and thereby reduce demand for, the oil and natural gas we produce.
Moreover, any legislation or regulatory programs to reduce GHG emissions could increase the cost of consumption, and thereby reduce demand for, the oil and natural gas we produce. Consequently, legislation and regulatory programs to reduce emissions of GHGs could have an adverse effect on our business, financial condition and results of operations.
Our assets consist primarily of producing oil and natural gas properties located in Oklahoma, the Rockies (“Bairoil”), federal waters offshore Southern California (“Beta”), East Texas/North Louisiana, and Eagle Ford (Non-op). Most of our oil and natural gas properties are located in large, mature oil and natural gas reservoirs.
Our assets have historically consisted primarily of producing oil and natural gas properties located in Oklahoma, the Rockies (“Bairoil”), federal waters offshore Southern California (“Beta”), East Texas/North Louisiana, and the Eagle Ford (Non-op).
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.
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 final rule also codified the use of the BSEE’s probabilistic estimates of decommissioning costs in setting the levels of demand for supplemental financial assurance, removed restrictive provisions for third-party guarantees and decommissioning accounts, and added new criteria for cancelling supplemental financial assurance. BSEE is responsible for safety and environmental oversight of offshore oil and gas operations.
The final rule also codified the use of the BSEE’s probabilistic estimates of decommissioning costs in setting the levels of demand for supplemental financial assurance, removed restrictive provisions for third-party guarantees and decommissioning accounts, and added new criteria for cancelling supplemental financial assurance.
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.
Qualifications of Responsible Technical Persons Internal Engineers . For the period covered by this Annual Report, Tony Lopez served as 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 20 years of corporate reserve reporting experience. Mr.
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.
At December 31, 2025, we had 0 gross (0 net) wells that were being developed. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ Gross ​ ​ ​ Net ​ Gross ​ ​ ​ Net ​ ​ ​ Gross ​ ​ ​ Net Development wells: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Productive 26.0 5.9 ​ 11.0 2.0 9.0 0.5 Dry — — ​ — — — — Exploratory wells: ​ ​ ​ ​ ​ ​ ​ Productive — — ​ — — — — Dry — — ​ — — — — Total wells: ​ ​ ​ ​ ​ ​ ​ Productive 26.0 5.9 ​ 11.0 2.0 9.0 0.5 Dry — — ​ — — — — Total 26.0 5.9 ​ 11.0 2.0 9.0 0.5 ​ 21 Table of Contents Delivery Commitments We have no commitments to deliver a fixed and determinable quantity of our oil production in the near future under our existing sales contracts.
Indeed, legislation has been proposed from time to time in Congress to re-categorize certain oil and gas exploration and production wastes as “hazardous wastes.” Any such changes, including to state programs, could result in an increase in our costs to manage and dispose of oil and gas waste, which could have a material adverse effect on our maintenance capital expenditures and operating expenses.
Indeed, legislation has been proposed from time to time in Congress to re-categorize certain oil and gas exploration and production wastes as “hazardous wastes.” Any such changes, including to state programs, could result in an increase in our costs to manage and dispose of oil and gas waste, which could have a material adverse effect on our maintenance capital expenditures and operating expenses. 26 Table of Contents It is possible that our oil and natural gas operations may require us to manage naturally occurring radioactive materials (“NORM”).
Brooker’s experience includes significant projects in both conventional and unconventional resources in every major U.S. producing basin and abroad, including oil and gas shale plays, coalbed methane fields, waterfloods and complex, faulted structures. Mr.
Brooker worked in Gulf of Mexico drilling and production engineering at Chevron Corporation. Mr. Brooker’s experience includes significant projects in both conventional and unconventional resources in every major U.S. producing basin and abroad, including oil and gas shale plays, coalbed methane fields, waterfloods and complex, faulted structures. Mr.
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.
As of December 31, 2025, approximately 56% 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 57% of the employees located in our corporate headquarters self-identified as a racial or ethnic minority and approximately 67% self-identified as female.
These agency actions have been intended to foster increased competition within all phases of the gas industry. To date, the FERC’s pro-competition policies have not materially affected our business or operations. It is unclear what impact, if any, future rules or increased competition within the gas industry will have on our gas sales efforts.
These agency actions have been intended to foster increased competition within all phases of the gas industry. To date, the FERC’s pro-competition policies have not materially affected our business or operations.
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.
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.
The designation of previously unidentified endangered or threatened species in areas where we operate could cause us to incur additional costs or become subject to operating delays, restrictions or bans. Numerous species have been listed or proposed for protected status in areas in which we currently, or could in the future, undertake operations.
The designation of previously unidentified endangered or threatened species in areas where we operate could cause us to incur additional costs or become subject to operating delays, restrictions or bans.
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.
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.
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.
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.
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.
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, 2025, we had 13,475 MBoe of PUDs, comprised of 13,475 MBbls of oil.
We require all employees to complete periodic training sessions on various aspects of our corporate policies through an annual acknowledgment and certification process. 37 Table of Contents Health and Wellness We support our employees and their families by offering a robust package of health and welfare benefits, medical, dental, and vision insurance plans for employees and their families, life insurance and long-term disability plans, paid time off for holidays, vacation, sick leave, and other personal leave, and health and dependent care savings accounts.
Health and Wellness We support our employees and their families by offering a robust package of health and welfare benefits, medical, dental, and vision insurance plans for employees and their families, life insurance and long-term disability plans, paid time off for holidays, vacation, sick leave, and other personal leave, and health and dependent care savings accounts.
No director, officer, or key employee of CG&A has any financial ownership in us or any of our affiliates. CG&A’s compensation for the preparation of its report is not contingent upon the results obtained and reported. CG&A has not performed other work for us or any of our affiliates that would affect its objectivity.
CG&A’s compensation for the preparation of its report is not contingent upon the results obtained and reported. CG&A has not performed other work for us or any of our affiliates that would affect its objectivity. The estimates of our proved reserves presented in the CG&A reserve report were overseen by Todd Brooker. Mr.
The following table summarizes production volumes from this field for the period presented: ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Production Volumes (1) : ​ ​ ​ Oil (MBbls) 1,170 ​ 679 NGLs (MBbls) — ​ — Natural Gas (MMcfe) — ​ — Total (MBoe) 1,170 679 Average net production (MBoe/d) 3.2 1.9 (1) The Beta field restarted production in April 2023. ​ East Texas / North Louisiana Approximately 30% of our estimated proved reserves as of December 31, 2024 and approximately 36% of our average daily net production for the three months ended December 31, 2024 were located in the East Texas/ North Louisiana region.
The following table summarizes production volumes from the Beta field for the period presented: ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Production Volumes: ​ ​ ​ Oil (MBbls) 1,363 ​ 1,170 Total (MBoe) 1,363 1,170 Average net production (MBoe/d) 3.7 3.2 16 Table of Contents ​ Bairoil Approximately 36% of our estimated proved reserves as of December 31, 2025 and approximately 44% of our average daily net production for the three months ended December 31, 2025 were located in Bairoil.
A critical habitat or suitable habitat designation could result in further material restrictions to land use and may materially delay or prohibit land access for oil and natural gas development.
Fish and Wildlife Service (“FWS”) must also designate the species’ critical habitat and suitable habitat as part of the effort to ensure survival of the species. A critical habitat or suitable habitat designation could result in further material restrictions to land use and may materially delay or prohibit land access for oil and natural gas development.
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.
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.
Additionally, in 2016, the BLM finalized rules related to further controlling the venting and flaring of natural gas on BLM land, which was challenged by a group of states. In September 2018, the BLM published a final rule that revised the 2016 rules, which was again challenged by states and environmental groups.
In September 2018, the BLM published a final rule that revised the 2016 rules, which was again challenged by states and environmental groups.
The FERC does not regulate the sale of oil or petroleum products or the construction of oil or other liquids pipelines, but does regulate the rates and terms and conditions of service on oil and liquids pipelines.
The FERC does not regulate the sale of oil or petroleum products or the construction of oil or other liquids pipelines, but does regulate the rates and terms and conditions of service on oil and liquids pipelines. The Beta properties include the San Pedro Bay Pipeline Company, which owns and operates an offshore crude oil pipeline.
However, roughly half of the states and other plaintiffs are continuing to challenge the rule, and the EPA and the Corps are using the pre-2015 definition of WOTUS in these states while litigation continues. As a result, substantial uncertainty exists with respect to future implementation of the September 2023 rule and the scope of CWA jurisdiction more generally.
However, roughly half of the states and other plaintiffs are continuing to challenge the rule, and the EPA and the Corps are using the pre-2015 definition of WOTUS in these states while litigation continues.
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.
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. His reserve reports are routinely used for public company SEC disclosures. Prior to joining CG&A, Mr.
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.
Federal and state legislative and regulatory initiatives relating to pipeline safety that require the use of new or more stringent safety controls or result in more stringent enforcement of applicable legal requirements could subject us to increased capital costs, operational delays and costs of operation. 33 Table of Contents 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.
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.
The following table sets forth information as of December 31, 2025 relating to our leasehold acreage. ​ ​ ​ ​ ​ ​ Region ​ Developed Acreage (1) ​ ​ ​ ​ Gross (2) ​ ​ ​ Net (3) Bairoil 6,653 ​ 6,653 Beta 17,280 ​ 17,280 Total 23,933 23,933 (1) Developed acres are acres spaced or assigned to productive wells or wells capable of production.
To attract and retain top talent, our human resources programs are designed to reward and incentivize our employees through competitive compensation practices, our commitment to employee health and safety, training and talent development and our commitment to diversity and inclusion. 36 Table of Contents Safety Safety is our highest priority, and we are dedicated to the well-being of our employees, contractors, business partners, stakeholders and the environment.
To attract and retain top talent, our human resources programs are designed to reward and incentivize our employees through competitive compensation practices, our commitment to employee health and safety, training and talent development and our commitment to inclusion.
The EPA has also adopted regulations requiring certain oil and natural gas exploration and production facilities to obtain individual permits or coverage under general permits for storm water discharges.
As a result, substantial uncertainty exists with respect to future implementation of the September 2023 rule and the scope of CWA jurisdiction more generally. The EPA has also adopted regulations requiring certain oil and natural gas exploration and production facilities to obtain individual permits or coverage under general permits for storm water discharges.
We are currently evaluating the impact of the SEC Climate Rules and there remains uncertainty as to whether these rules will withstand pending and future legal challenges. While we are subject to certain federal GHG monitoring and reporting requirements, our operations are not currently adversely impacted by existing federal, state and local climate change initiatives.
While we are subject to certain federal GHG monitoring and reporting requirements, our operations are not currently adversely impacted by existing federal, state and local climate change initiatives.
The Company’s properties consist primarily of operated and non-operated working interests in producing and undeveloped leasehold acreage and working interests in identified producing wells.
As of the date of this Annual Report, our remaining properties consist solely of Bairoil and Beta. As of the date of this Annual Report, the Company’s properties consist of operated working interests in producing and undeveloped leasehold acreage and working interests in identified producing wells.
Derivative Activities We enter into commodity derivative contracts with unaffiliated third parties, generally lenders under our Revolving Credit Facility or their affiliates, to achieve more predictable cash flows and to reduce our exposure to fluctuations in oil and natural gas prices.
Burdens on properties may include customary royalty interests, liens incident to operating agreements and for current taxes, obligations or duties under applicable laws, development obligations under natural gas leases, or net profits interests. 22 Table of Contents Derivative Activities We enter into commodity derivative contracts with unaffiliated third parties, generally lenders under our Revolving Credit Facility or their affiliates, to achieve more predictable cash flows and to reduce our exposure to fluctuations in oil and natural gas prices.
The EPA has developed, and continues to develop, stringent regulations governing emissions of air pollutants at specified sources.
The EPA has developed, and continues to develop, stringent regulations governing emissions of air pollutants at specified sources. New facilities may be required to obtain permits before work can begin, and modified and existing facilities may be required to obtain additional permits.
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.
In August 2022, the prior Biden Administration signed into law the Inflation Reduction Act. The Inflation Reduction Act included a methane emissions reduction program that amended the CAA to include a Methane Emissions and Waste Reduction Incentive Program for petroleum and natural gas systems.
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.
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. Some states have enacted regulations governing the handling, treatment, storage and disposal of NORM.
Then, on October 17, 2024, FERC issued a supplemental notice of proposed rulemaking proposing to reduce the index price back to the producer price index for finished goods minus 0.21%; that proposal is now pending at FERC. The San Pedro Bay Pipeline Company uses the indexing methodology to change its rates.
On November 20, 2025, FERC issued a Notice of Proposed Rulemaking proposing to set the producer price index for finished goods at minus 1.42% as the index level for the five-year period commencing July 1, 2026. This proposed rule is now pending. The San Pedro Bay Pipeline Company uses the indexing methodology to change its rates.
BSEE regulations also restrict the flaring or venting of natural gas, prohibit the flaring of liquid hydrocarbons and govern the plugging and abandonment of wells located offshore and the installation and removal of all fixed drilling and production facilities.
BSEE regulations also restrict the flaring or venting of natural gas, prohibit the flaring of liquid hydrocarbons and govern the plugging and abandonment of wells located offshore and the installation and removal of all fixed drilling and production facilities. 25 Table of Contents BOEM and BSEE have adopted regulations providing for enforcement actions, including civil penalties and lease forfeiture or cancellation for failure to comply with regulatory requirements for offshore operations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example, in October 2023, California enacted legislation that will ultimately require certain companies that (i) do business in California to publicly disclose their Scopes 1, 2 and 3 greenhouse gas emissions, with third party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures and (ii) operate in California and make certain climate-related claims to provide enhanced disclosures around the achievement of climate-related claims, including the use of voluntary carbon credits to achieve such claims. 52 Table of Contents At the international level, in 2015, at COP21 the international community adopted the Paris Agreement, an international treaty aimed at addressing climate change whereby parties agreed to determine national contributions and set GHG emission reduction goals every five years beginning in 2020.
Biggest changeFor example, in October 2023, California enacted legislation that will ultimately require certain companies that do business in California to publicly disclose certain climate-related information, including their Scopes 1, 2 and 3 GHG emissions, with third party assurance of such data, and their climate-related financial risks and related mitigation measures with certain disclosures required in 2026.
The borrowing base is subject to redetermination on at least a semi-annual basis primarily based on an engineering report with respect to our estimated natural gas, oil and NGL reserves, which takes into account the prevailing natural gas, oil and NGL prices at such time, as adjusted for the impact of our commodity derivative contracts.
The borrowing base is subject to redetermination on at least a semi-annual basis primarily based on an engineering report with respect to our estimated oil and NGL reserves, which takes into account the prevailing natural gas, oil and NGL prices at such time, as adjusted for the impact of our commodity derivative contracts.
We are required to post cash collateral and may be in the future required to post additional collateral, pursuant to our agreements with sureties under our existing or future bonding arrangements, which may have a material adverse effect on our liquidity and our ability to execute our capital expenditure plan, our ARO plan and comply with our existing debt instruments.
We are required to post cash collateral, and in the future we may be required to post additional collateral, pursuant to our agreements with sureties under our existing or future bonding arrangements, which may have a material adverse effect on our liquidity and our ability to execute our capital expenditure plan, our ARO plan and comply with our existing debt instruments.
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.
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, 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; 37 Table of Contents ● 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 or entanglements in the Middle East and South America, 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.
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.
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 equipment, labor, electrical power or other services; ● unusual or unexpected geological formations; 42 Table of Contents ● 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.
The unavailability or high cost of rigs, equipment, supplies and crews could delay our operations, increase our costs and delay forecasted revenue. Our industry is cyclical, and historically there have been periodic shortages of rigs, equipment, supplies and crew.
The unavailability or high cost of equipment, supplies and crews could delay our operations, increase our costs and delay forecasted revenue. Our industry is cyclical, and historically there have been periodic shortages of equipment, supplies and crew.
Alternatively, during periods of higher oil and natural gas prices, the demand for rigs, equipment, supplies and crews is increased and can lead to shortages of, and increasing costs for, development equipment, supplies, services and personnel.
Alternatively, during periods of higher oil and natural gas prices, the demand for equipment, supplies and crews is increased and can lead to shortages of, and increasing costs for, development equipment, supplies, services and personnel.
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.
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.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. Borrowings under our Revolving Credit Facility bear interest at variable rates and expose us to interest rate risk.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase. Borrowings under our Revolving Credit Facility bear interest at variable rates and expose us to interest rate risk.
However, any additional orders or regulations addressing concerns about seismic activity from well injection in jurisdictions where we operate could affect our operations. See “Item 1.
Any additional orders or regulations addressing concerns about seismic activity from well injection in jurisdictions where we operate could affect our operations. See “Item 1.
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.
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 17, “Commitments and Contingencies — Supplemental Bond for Decommissioning Liabilities Trust Agreement” of the Notes to Consolidated Financial Statements included under Part II, “Item 8.
Institutional lenders who provide financing to energy companies such as ours have also become more attentive to sustainable lending practices, and some may elect not to provide traditional energy producers or companies that support such producers with funding. Certain other stakeholders have also pressured commercial and investment banks to stop financing oil and gas production and related infrastructure projects.
Institutional lenders who provide financing to energy companies such as ours may be more attentive to sustainable lending practices, and some may elect not to provide traditional energy producers or companies that support such producers with funding. Certain other stakeholders have also pressured commercial and investment banks to stop financing oil and gas production and related infrastructure projects.
Our Revolving Credit Facility allows us to borrow in an amount up to the borrowing base, which is primarily based on the estimated value of our oil and natural gas properties and our commodity derivative contracts as determined semi-annually by our lenders in their sole discretion.
Our Revolving Credit Facility allows us to borrow in an amount up to the borrowing base, which is primarily based on the estimated value of our oil properties and our commodity derivative contracts as determined semi-annually by our lenders in their sole discretion.
Many of the derivative contracts to which we will be a party will require us to make cash payments to the extent the applicable index exceeds a predetermined price, thereby limiting our ability to realize the benefit of increases in oil, natural gas and NGL prices.
Many of the derivative contracts to which we will be a party will require us to make cash payments to the extent the applicable index exceeds a predetermined price, thereby limiting our ability to realize the benefit of increases in oil and NGL prices.
Any limitation in the availability of those facilities could interfere with our ability to market our oil and natural gas production. The marketability of our oil and natural gas production depends in part on the availability, proximity and capacity of pipelines and other transportation methods, gathering systems and processing facilities owned by third parties.
Any limitation in the availability of those facilities could interfere with our ability to market our oil production. The marketability of our oil production depends in part on the availability, proximity and capacity of pipelines and other transportation methods, gathering systems and processing facilities owned by third parties.
The amount of oil and natural gas that can be produced and sold is subject to curtailment in certain circumstances, such as pipeline interruptions due to scheduled and unscheduled maintenance, excessive pressure, physical damage or lack of contracted capacity on such systems.
The amount of oil that can be produced and sold is subject to curtailment in certain circumstances, such as pipeline interruptions due to scheduled and unscheduled maintenance, excessive pressure, physical damage or lack of contracted capacity on such systems.
Potential adverse effects could include disruption of our production activities, increases in our costs of operation or reductions in the efficiency of our operations, impacts on our personnel, supply chain, or distribution chain, as well as potentially increased costs for insurance coverages in the aftermath of such effects.
Potential adverse effects could include disruption of our production activities, increases in our costs of operation or reductions in the efficiency of our operations, impacts on our personnel, supply chain, or distribution chain, as well as potentially increased costs for or limited availability of insurance coverages in the aftermath of such effects.
The prices we receive for our production are also affected by the specific characteristics of the production relative to production sold at benchmark prices. For example, our California oil typically has a lower gravity, and a portion has higher sulfur content, than oil sold at certain benchmark prices.
The prices we receive for our production are also affected by the specific characteristics of the production relative to production sold at benchmark prices. For example, our Beta oil typically has a lower gravity, and a portion has higher sulfur content, than oil sold at certain benchmark prices.
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.
Actual future production, oil 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.
Financial Statements and Supplementary Data,” in this Annual Report for additional information. Certain U.S. federal income tax deductions currently available with respect to oil and natural gas exploration and production may be eliminated as a result of future legislation.
Financial Statements and Supplementary Data,” in this Annual Report for additional information. 53 Table of Contents Certain U.S. federal income tax deductions currently available with respect to oil and natural gas exploration and production may be eliminated as a result of future legislation.
Sustained declines in oil and natural gas prices may reduce the number of service providers for such rigs, equipment, supplies and crews, contributing to or resulting in shortages.
Sustained declines in oil and natural gas prices may reduce the number of service providers for equipment, supplies and crews, contributing to or resulting in shortages.
In many cases, we are provided with only limited, if any, notice as to when these circumstances will arise and their duration. Any significant curtailment in gathering system or transportation or processing facility capacity could reduce our ability to market our oil and natural gas production and harm our business, financial condition, results of operations and cash flows.
In many cases, we are provided with only limited, if any, notice as to when these circumstances will arise and their duration. Any significant curtailment in gathering systems or transportation or processing facility capacity could reduce our ability to market our oil production and harm our business, financial condition, results of operations and cash flows.
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.
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 In August 2022, then-President Biden signed into law the Inflation Reduction Act of 2022.
We entered into two escrow funding agreements with certain of our surety providers to fund interest-bearing escrow accounts to reimburse and indemnify the surety providers for any claims arising under the surety bonds related to the decommissioning of our Beta properties.
We have two escrow funding agreements with certain of our surety providers to fund interest-bearing escrow accounts to reimburse and indemnify the surety providers for any claims arising under the surety bonds related to the decommissioning of our Beta properties.
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.
Any further reduction in the borrowing base may 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.
Negative public perception could cause the permits we need to conduct our operations to be withheld, delayed, or burdened by requirements that restrict our ability to profitably conduct our business. In addition, various officials and candidates at the federal, state and local levels, have made climate-related pledges or proposed banning hydraulic fracturing altogether.
Negative public perception could cause the permits we need to conduct our operations to be withheld, delayed, or burdened by requirements that restrict our ability to profitably conduct our business. In addition, various officials and candidates at the federal, state and local levels have made climate-related pledges.
Compliance with current and future environmental regulations and permit requirements governing the withdrawal, storage and use of surface water or groundwater necessary for hydraulic fracturing of wells, and the disposal and recycling of produced water, drilling fluids, and other wastes, may increase our operating costs and cause delays, interruptions or termination of our operations, the extent of which cannot be predicted.
Compliance with current and future environmental regulations and permit requirements governing the withdrawal, storage and use of surface water or groundwater and the disposal and recycling of produced water, drilling fluids, and other wastes, may increase our operating costs and cause delays, interruptions or termination of our operations, the extent of which cannot be predicted.
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.
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.
Business — Environmental, Occupational Health and Safety Matters and Regulations — Water Discharges and Other Waste Discharges & Spills” and “— Hydraulic Fracturing” for an additional description of the laws and regulations relating to the discharge of water and other wastes and hydraulic fracturing that affect us.
Business — Environmental, Occupational Health and Safety Matters and Regulations — Water Discharges and Other Waste Discharges & Spills” and “— Hydraulic Fracturing” for an additional description of the laws and regulations relating to the discharge of water and other wastes and hydraulic fracturing that affect us. The cost of decommissioning is uncertain.
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.
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, are substantially dependent on the availability of water and the disposal of waste, including produced water and drilling fluids.
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.
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.
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 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.
We are subject to complex federal, state, local and other laws and regulations that could adversely affect the cost, manner or feasibility of conducting our operations.
We are subject to, and in the future may be subject to additional complex federal, state, local and other laws and regulations that could adversely affect the cost, manner or feasibility of conducting our operations.
These changes include, but are not limited to, (i) the repeal of the percentage depletion allowance for oil and natural gas properties, (ii) the elimination of current deductions for intangible drilling and development costs, or IDCs, (iii) the elimination of the deduction for certain domestic production activities and (iv) an extension of the amortization period for certain geological and geophysical expenditures.
Such proposed legislative changes have included, but have not been limited to, (i) the repeal of the percentage depletion allowance for oil and natural gas properties, (ii) the elimination of current deductions for intangible drilling and development costs, or IDCs, (iii) the elimination of the deduction for certain domestic production activities and (iv) an extension of the amortization period for certain geological and geophysical expenditures.
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.
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.
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.
For example, for the five years ended December 31, 2025, the NYMEX-WTI oil future price ranged from a high of $122.11 per Bbl to a low of $47.62 per Bbl, while the NYMEX-Henry Hub natural gas future price ranged from a high of $9.68 per MMBtu to a low of $1.58 per MMBtu.
In past years, legislation has been proposed that would, if enacted into law, make significant changes to U.S. tax laws, including the elimination of certain key U.S. federal income tax incentives currently available to oil and natural gas exploration and production companies.
From time to time, legislation has been proposed that would, if enacted into law, make significant changes to U.S. tax laws, including certain key U.S. federal income tax incentives currently available to oil and natural gas exploration and production companies.
The Incident may result in more stringent permitting obligations and regulation of our properties and other oil and gas activities, including at Beta and elsewhere, particularly relating to environmental, health and safety protection controls, oversight of oil and gas operations and required financial assurance.
Further, the Incident (as defined below) or any similar future incidents may result in more stringent permitting obligations and regulation of our properties and other oil and gas activities, including at Beta and elsewhere, particularly relating to environmental, health and safety protection controls, oversight of oil and gas operations and required financial assurance.
Further, our decline rate may change when we drill additional wells or make acquisitions. We may not be able to develop, find or acquire additional reserves to replace our current and future production at economically acceptable terms, which would materially and adversely affect our business, financial condition and results of operations.
We may not be able to develop, find or acquire additional reserves to replace our current and future production at economically acceptable terms, which would materially and adversely affect our business, financial condition and results of operations.
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.
We are vulnerable to the risks associated with operating in the Pacific Outer Continental Shelf, 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, such as the anchor dragging incident at Beta in 2021; ● 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.
However, in January 2025, President Trump issued an executive order directing the heads of all federal agencies to identify and begin the processes to suspend, revise, or rescind all agency actions that are unduly burdensome on the identification, development, or use of domestic energy resources. Consequently, future implementation and enforcement of these rules remain uncertain at this time.
However, in January 2025, President Trump issued an executive order directing the heads of all federal agencies to identify and begin the processes to suspend, revise, or rescind all agency actions that are unduly burdensome on the identification, development, or use of domestic energy resources.
Our business could be adversely affected by a decline in general economic conditions or a weakening of the broader energy industry, and inflation may adversely affect our financial position and operating results.
Business — Operations — Marketing and Major Customers.” 38 Table of Contents Our business could be adversely affected by a decline in general economic conditions or a weakening of the broader energy industry, and inflation may adversely affect our financial position and operating results.
Under our Revolving Credit Facility, we are required to (i) maintain, as of the date of determination, a maximum total debt to EBITDAX ratio of 3.00 to 1.00, (ii) maintain a current ratio of not less than 1.00 to 1.00, and (iii) hedge at least 50% − 75% of our estimated production from total proved developed producing reserves.
Under our Revolving Credit Facility, we are required to (i) maintain, as of the date of determination, a maximum total debt to EBITDAX ratio of 3.00 to 1.00, commencing with the fiscal quarter ending March 31, 2026, (ii) maintain a current ratio of not less than 1.00 to 1.00, and (iii) hedge at least 25%−75%, depending on availability under the Revolving Credit Facility, of our estimated production from total proved developed producing reserves.
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.
Many of our properties are in areas that may have been partially depleted or drained. Many of our properties are in areas that may have already been partially depleted or drained.
Business — Operations — Marketing and Major Customers.” The inability of our significant customers to meet their obligations to us may adversely affect our financial results. We are subject to credit risk due to concentration of our oil and natural gas receivables.
The inability of our significant customers, vendors or other counterparties to meet their obligations to us may adversely affect our financial results. We are subject to credit risk due to the concentration of our oil and natural gas receivables.
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.
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.
The oil and natural gas industry is intensely competitive with respect to acquiring prospects and productive properties, marketing oil and natural gas and securing equipment and trained personnel.
We may be unable to compete effectively with larger companies. The oil and natural gas industry is intensely competitive with respect to acquiring prospects and productive properties, marketing oil and natural gas and securing equipment and trained personnel.
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.
The passage of any legislation as a result of these proposals or any 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.
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.
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. At the same time, recent political developments could subject the Company to increased risk of criticism or litigation risks from certain “anti-ESG” parties.
Additionally, many of the states have taken legal measures to reduce emissions of GHGs, including through the planned development of GHG emission inventories and/or regional GHGs cap and trade programs.
Consequently, future implementation and enforcement of these rules remain uncertain at this time. Additionally, many of the states have taken legal measures to reduce emissions of GHGs, including through the planned development of GHG emission inventories and/or regional GHGs cap and trade programs.
Restrictions on the ability to obtain water or dispose of waste may impact our operations. Water is an essential component of oil and natural gas production during the drilling, and in particular, hydraulic fracturing, process.
Restrictions on the ability to obtain water or dispose of waste may impact our operations. Water is an essential component of oil and natural gas production during the drilling process. Our inability to locate sufficient amounts of water or to dispose of or recycle water used in our development and production operations could adversely impact our operations.
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.
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.
Also, if any significant customer reduces the volume it purchases from us, we could experience a temporary interruption in sales of, or may receive a lower price for, our production, and our revenues and cash flows could decline.
Also, if any significant customer reduces the volume it purchases from us, we could experience a temporary interruption in sales of, or may receive a lower price for, our production, or we could be required to shut in all or a portion of our production, any of which could cause our revenues and cash flows to decline and have a material adverse effect on our results of operations.
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.
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.
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.
We had two customers that each accounted for 10% or more of total reported revenues for the year ended December 31, 2025. 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.
However, in January 2025, President Trump issued an executive order directing the immediate notice to the United Nations of the United States’ withdrawal from the Paris Agreement and any similar commitment made under the UN Framework Convention on Climate Change.
However, in January 2025, President Trump issued an executive order directing the immediate notice to the United Nations of the United States’ withdrawal from the Paris Agreement. The withdrawal became effective in January 2026. In January 2026, President Trump announced the United States will also withdraw from the UN Framework Convention on Climate Change.
In 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.
In 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.
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.
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. 47 Table of Contents Our Revolving Credit Facility also requires us to comply with certain financial maintenance covenants as discussed above.
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.
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. Our lenders periodically redetermine the amount we may borrow under our Revolving Credit Facility, which may materially impact our operations.
Some of our vendors and other counterparties may be highly leveraged and subject to their own operating and regulatory risks. Many of our vendors and other counterparties finance their activities through cash flow from operations, the incurrence of debt or the issuance of equity.
Many of our vendors and other counterparties finance their activities through cash flow from operations, the incurrence of debt or the issuance of equity.
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.
Risks that we may face while completing wells include, but are not limited to, the following: ● the ability to run tools the entire length of the wellbore during completion operations; and 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.
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.
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.
The estimates of decommissioning costs are inherently imprecise and subject to change due to changing cost estimates, oil and natural gas prices and other factors.
We are required to maintain reserve funds to provide for the payment of decommissioning costs associated with the Beta properties. The estimates of decommissioning costs are inherently imprecise and subject to change due to changing cost estimates, oil and natural gas prices and other factors.
If our outstanding borrowings exceed the borrowing base and we are unable to repay the deficiency or pledge additional oil and gas properties to eliminate such deficiency, our failure to repay any of the installments due related to the borrowing base deficiency would constitute an event of default under the Revolving Credit Facility and as such, the lenders could declare all outstanding principal and interest to be due and payable, could freeze our accounts, or foreclose against the assets securing the obligations owed under our Revolving Credit Facility.
If our outstanding borrowings exceed the borrowing base and we are unable to repay the deficiency or pledge additional oil and gas properties to eliminate such deficiency, our failure to repay any of the installments due related to the borrowing base deficiency would constitute an event of default under the Revolving Credit Facility and as such, the lenders could declare all outstanding principal and interest to be due and payable, could freeze our accounts, or foreclose against the assets securing the obligations owed under our Revolving Credit Facility. 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.
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.
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.
The emissions reported under the Greenhouse Gas Reporting Program will be the basis for any payments under the Methane Emissions Reduction Program. However, petitions for reconsideration to the EPA are pending and litigation in the D.C. Circuit has commenced.
To implement the program, in May 2024, the EPA finalized revisions to the Greenhouse Gas Reporting Program for petroleum and natural gas facilities. The emissions reported under the Greenhouse Gas Reporting Program were set as the basis for any payments under the Methane Emissions Reduction Program. However, petitions for reconsideration to the EPA are pending and litigation in the D.C.
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.
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.
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.
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 WEC on certain oil and gas sources that are already required to report under EPA’s Greenhouse Gas Reporting Program.
New laws and regulations continue to be enacted, particularly at the state level, and, under the Biden Administration, the long-term trend of more expansive and stringent environmental legislation and regulations applied to the crude oil and natural gas industry could continue, resulting in increased costs of doing business and consequently affecting profitability.
New laws and regulations continue to be enacted, particularly at the state level, resulting in increased costs of doing business and consequently affecting profitability.
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.
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. 39 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.
We intend 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 in time. These commodity derivative contracts include natural gas, oil and NGL financial swaps, put options, costless collars, and three-way collars.
We intend to maintain a portfolio of commodity derivative contracts covering at least 25%- 75%, depending on availability under the Revolving Credit Facility, of our estimated production from proved developed producing reserves over a one-year period at any given point in time.
Additionally, we also depend on our ability to attract and retain qualified personnel to operate and expand our business. If we fail to attract or retain talented new employees, our business and results of operations could be negatively affected.
Additionally, we also depend on our ability to attract and retain qualified personnel to operate and expand our business.
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.
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.
Despite this, various states and local governments in the U.S. have vowed to continue to enact regulations to achieve the goals of the Paris Agreement. Additionally, on March 6, 2024, the SEC adopted the SEC Climate Rules.
Despite this, various states and local governments have vowed to continue to enact regulations to achieve the goals of the Paris Agreement, and related initiatives are expected to continue.
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.
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.
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.
For the year ended December 31, 2025, the WTI posted prices ranged from a high of $80.04 per Bbl on January 5, 2025 to a low of $55.27 per Bbl on December 16, 2025 and NYMEX-Henry Hub natural gas market price ranged from a high of $5.29 per MMBtu on December 5, 2025 to a low of $2.70 per MMBtu on August 22, 2025.
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 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.
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.
Finally, maintenance activities undertaken to reduce operational risks can be costly and can require exploration, exploitation and development operations to be curtailed while those activities are being completed. 44 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.
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 are dependent upon a small number of significant customers for the majority 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.
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.
These discounts, if significant, could reduce our cash flows and adversely affect our results of operations and financial condition. 40 Table of Contents The production from our Bairoil properties could be adversely affected by the cessation or interruption of the supply of CO 2 to those properties.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe 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.
Biggest changeA strong partnership exists between our information technology, finance, operations, internal audit, and legal departments for the purpose of addressing identified issues in a timely manner and reporting incidents as required. 56 Table of Contents The Nominating & Governance Committee, which is comprised entirely of independent directors, has primary responsibility for oversight of our initiatives, policies, and performance regarding risk management matters, including information security, cybersecurity, business continuity, and data protection and privacy.
Our Vice President of Information Technology, who has nearly two decades of information technology and cybersecurity risk management experience in the oil and natural gas industry, serves as the chair of the Steering Committee. The Steering Committee includes senior executives and managers, with significant risk management expertise, from multiple areas of the business.
Our Vice President of Information Technology, who has nearly two decades of information technology and cybersecurity risk management experience, serves as the chair of the Steering Committee. The Steering Committee includes senior executives and managers, with significant risk management expertise, from multiple areas of the business.
Through our cybersecurity risk management process, which is overseen by the Amplify Information Technology Steering Committee (the “Steering Committee”), we continuously monitor cybersecurity vulnerabilities and potential attack vectors and evaluate the potential operational and financial effects of any threat and of cybersecurity risk countermeasures made to defend against such threats.
Through our cybersecurity risk management process overseen by the Amplify Information Technology Steering Committee (the “Steering Committee”) we continuously monitor vulnerabilities and potential attack vectors and evaluate the potential operational and financial effects of cyber threats and of the countermeasures we implement to defend against them.
We 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.
Our information security program includes physical, administrative, and technical safeguards, and plans and procedures designed to help us timely and effectively respond to cybersecurity threats or incidents, including those involving third-party service providers that have access to our systems or data or that support critical business operations.
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.
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.
Our cybersecurity risk management processes include technical security controls, policy enforcement mechanisms, monitoring systems, contractual arrangements, tools and related services from third-party providers, and management oversight to assess, identify and manage risks from cybersecurity threats.
ITEM 1C. CYBERSECURITY Our cybersecurity strategy is risk-based and is designed to reduce the likelihood and impact of cyber threats through prevention, detection, analysis, response, and resiliency. Our risk management processes include technical controls, policy enforcement mechanisms, continuous monitoring, contractual arrangements, use of third-party tools and services, and management oversight to assess, identify, and manage risks from cybersecurity threats.
We also leverage industry and government associations, third-party benchmarking, internal and external Company audit results, threat intelligence feeds, and other similar resources to form our cybersecurity processes and allocate resources.
We also leverage industry and government associations, third party benchmarking, internal and external Company audit results, threat intelligence feeds, and similar resources to inform our cybersecurity processes and resource allocation. We consume threat intelligence from multiple vendors including our cyber insurance partners and integrate those insights into our monitoring, detection, and response workflows.
This process has been integrated into the Company’s Risk Management Program, and we have integrated Cyber Incident Response planning into our Business Continuity Program. In addition, we routinely engage third-party consultants to assist us in assessing, enhancing, implementing, and monitoring our cybersecurity risk management programs and responding to any incidents.
This process is integrated into the Company’s overall Risk Management Program, and our Cyber Incident Response planning is integrated into our Business Continuity Program. In addition, we engage independent third-party consultants on a routine basis to assess, enhance, implement, and monitor our cybersecurity risk management program and to support incident response.
We implement risk-based controls to protect our information, the information of our customers and other third parties, our information systems, our business operations, and our produced products and related services. We have adopted security-control principles primarily based on the National Institute of Standards and Technology Cybersecurity Framework (NIST).
We implement controls to protect Company information (including the information of our customers and other third parties), our information systems, our business operations, and our products and services.
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ITEM 1C. CYBERSECURITY Our cybersecurity strategy prioritizes prevention, detection, analysis and response to known, anticipated or unexpected threats, effective management of security risks and resiliency against incidents.
Added
However, our financial, accounting, data processing, portfolio monitoring, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control.
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We also carry insurance that provides protection against the potential losses arising from a cybersecurity incident. We provide monthly cybersecurity awareness and weekly phishing simulations, data protection modules, tabletop exercises, as well as more contextual and personalized modules for targeted users and roles.
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We have adopted security control principles primarily based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) and, where applicable to our operational technology (OT) environment, ISA/IEC 62443.
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A strong partnership exists between our information technology, finance, operations, internal audit, and legal departments for the purpose of addressing identified issues in a timely manner and reporting incidents as required.
Added
Despite our implementation of a variety of security measures, our computer systems, networks, and data, like those of other companies, could be subject to cybersecurity threats or incidents. Cybersecurity threats or incidents are considered to be any adverse event that threatens the confidentiality, integrity or availability of the information resources of us or our portfolio companies.
Removed
Committee members have extensive experience working for and/or serving on the boards of directors of publicly traded companies and are experienced in overseeing cybersecurity and information security risks, understanding the cybersecurity threat landscape and/or assessing emerging cybersecurity risks. The Nominating & Governance Committee generally meets at least quarterly and as frequently as circumstances dictate.
Added
The result of these cybersecurity threats or incidents may include disrupted operations, including the ability to make distributions, misstated or unreliable financial data, failure to maintain the security, confidentiality or privacy of sensitive data, including personal information relating to investors (and the beneficial owners of investors), liability for stolen assets or information, regulatory penalties, increased cyber security protection and insurance costs, litigation and damage to business relationships, reputational damage, and increased costs associated with mitigation of damages and remediation.
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Members of senior management, representing a variety of teams and functions including information technology, operations, finance and legal, routinely provide updates regarding assessments of cyber risks, the threat landscape, and the Company’s cybersecurity risk mitigation and governance strategies.
Added
We conduct regular Company-wide awareness activities, including monthly cybersecurity training and weekly phishing simulations, and we run tabletop exercises and targeted, role-based modules for higher risk users. The results of these activities, along with key risk indicators and program metrics, are reviewed by management and shared with oversight bodies.
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The Committee generally meets at least quarterly and, together with members of senior management, reviews assessments of cyber risks, the threat landscape, and our risk mitigation and governance strategies. The Nominating & Governance Committee and senior management brief the full board of directors of the Company, as appropriate, on cybersecurity matters discussed during committee meetings.
Added
Management has established processes to assess the materiality of cybersecurity incidents, considering operational, financial, legal/regulatory, and reputational impacts, and to determine whether a series of otherwise immaterial incidents is material in the aggregate. These processes support timely disclosure and reporting under applicable SEC rules.
Added
Similarly, we intend to periodically evaluate and/or adjust internal policies governing our use of artificial intelligence technologies and our compliance with applicable data privacy laws and regulations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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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.
Biggest changeInformation pertaining to legal proceedings is described in Note 17, “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, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 57 Table of Contents PART II
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ITEM 3. LEGAL PROCEEDINGS As part of our normal business activities, we may be named as defendants in other litigation and legal proceedings, including those arising from regulatory and environmental matters. If we determine that a negative outcome is probable and the amount of loss is reasonably estimable, we accrue the estimated amount.
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ITEM 3. LEGAL PROCEEDINGS We are and may be, from time to time, party to various legal proceedings, government investigations and environmental proceedings. In addition, from time to time, we receive communications from government or regulatory agencies concerning investigations or allegations of noncompliance with laws or regulations in jurisdictions in which we operate.
Removed
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
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 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.
Biggest changeItem 4. Mine Safety Disclosures 57 ​ PART II ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 58 Item 6. Reserved 58 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 59

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 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.
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 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2025 - October 31, 2025 3,020 ​ $ 5.19 — n/a November 1, 2025 - November 30, 2025 51,569 ​ $ 4.89 — n/a December 1, 2025 - December 31, 2025 92,153 ​ $ 5.09 — n/a (1) Common shares are generally net-settled by shareholders to cover the required withholding tax upon vesting.
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.
As of February 28, 2026, we had twenty-two 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, 2025, we had 40,332,937 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, 2026, we had 41,265,055 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 changeSee “Revenue Payables in Suspense” discussion noted above for additional information. ​ 78 Table of Contents Reconciliation of Net Cash from Operating Activities to Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2024 2023 ​ ​ (In thousands) Net cash provided by operating activities ​ $ 51,293 ​ $ 141,590 Changes in working capital ​ 32,272 ​ (8,517) Interest expense, net ​ 14,599 ​ 17,719 Pipeline incident loss ​ 3,859 ​ 19,981 (Gain) loss on sale of property ​ (1,367) ​ — Litigation settlement ​ ​ — ​ (84,875) Income tax expense (benefit) - current ​ 232 ​ 4,817 Acquisition and divestiture related expenses ​ 1,633 ​ 219 Plugging and abandonment cost ​ 1,640 ​ 2,239 Amortization and write-off of deferred financing fees ​ (1,233) ​ (1,980) Exploration costs ​ 61 ​ 57 Cash settlements paid (received) on terminated derivatives ​ ​ (793) ​ ​ (658) Amortization of gain associated with terminated commodity derivatives ​ ​ 159 ​ ​ 658 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.
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. 71 Table of Contents Reconciliation of Net Income (Loss) to Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ (In thousands) Net income (loss) ​ $ 43,968 ​ $ 12,946 Interest expense, net ​ 15,577 ​ 14,599 Income tax expense (benefit) - current ​ ​ (1,377) ​ ​ 232 Income tax expense (benefit) - deferred ​ 18,248 ​ 2,196 Impairment expense ​ 42,450 ​ — DD&A ​ 32,484 ​ 32,586 Accretion of AROs ​ 8,861 ​ 8,438 Loss (gain) on commodity derivative instruments ​ (28,397) ​ 2,047 Cash settlements (paid) received on expired commodity derivative instruments ​ 16,784 ​ 17,617 (Gain) loss on sale of properties ​ (99,548) ​ (1,367) Share-based compensation expense ​ 8,292 ​ 6,799 Acquisition and divestiture related expenses ​ 9,890 ​ 1,633 Severance payments ​ ​ 6,814 ​ ​ — Amortization of gain associated with terminated commodity derivatives ​ ​ 636 ​ ​ 159 Pipeline incident loss ​ 2,423 ​ 3,859 Loss on settlement of AROs ​ 1,070 ​ 470 Exploration costs ​ 32 ​ 61 Bad debt expense ​ 1,188 ​ 80 Other ​ ​ 800 ​ ​ 686 Adjusted EBITDA (1) ​ $ 80,195 ​ $ 103,041 (1) Adjusted EBITDA includes a revenue suspense release of $0.4 million and $8.4 million for the year ended December 31, 2025 and 2024, respectively. ​ Reconciliation of Net Cash from Operating Activities to Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ (In thousands) Net cash provided by operating activities ​ $ 49,200 ​ $ 51,293 Changes in working capital ​ (3,561) ​ 32,272 Interest expense, net ​ 15,577 ​ 14,599 (Gain) loss on sale of property ​ — ​ (1,367) Acquisition and divestiture related expenses ​ 9,890 ​ 1,633 Pipeline incident loss ​ 2,423 ​ 3,859 Severance payments ​ ​ 6,814 ​ — Plugging and abandonment cost ​ 2,344 ​ 1,640 Amortization and write-off of deferred financing fees ​ (2,676) ​ (1,233) Cash settlements paid (received) on terminated derivatives ​ ​ 93 ​ ​ (793) Amortization of gain associated with terminated commodity derivatives ​ ​ 636 ​ ​ 159 Income tax expense (benefit) - current ​ (1,377) ​ 232 Exploration costs ​ 32 ​ 61 Other ​ 800 ​ 686 Adjusted EBITDA (1) ​ $ 80,195 ​ $ 103,041 (1) Adjusted EBITDA includes a revenue suspense release of $0.4 million and $8.4 million for the year ended December 31, 2025 and 2024, respectively. ​ 72 Table of Contents Liquidity and Capital Resources Overview.
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.
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 oil, natural gas, and NGLs.
Production taxes are paid on produced natural gas, NGLs and oil based on a percentage of market prices and at fixed per unit rates established by federal, state or local taxing authorities. We take advantage of credits and exemptions in the various taxing jurisdictions where we operate.
Production taxes are paid on produced oil, natural gas, and NGLs based on a percentage of market prices and at fixed per unit rates established by federal, state or local taxing authorities. We take advantage of credits and exemptions in the various taxing jurisdictions where we operate.
These costs include overhead, including payroll and benefits for employees, costs of maintaining headquarters, costs of managing production and development operations, compensation expenses associated with certain long-term incentive-based plans, audit and other professional fees and legal compliance expenses. ● Interest expense, net.
These costs include overhead, including payroll and benefits for certain employees, costs of maintaining headquarters, costs of managing production and development operations, compensation expenses associated with certain long-term incentive-based plans, audit and other professional fees and legal compliance expenses. ● Interest expense, net.
Significant changes in these estimates could result in a change to our estimated reserves, which could lead to a material change to our production depletion expense. Derivative Financial Instruments. Our commodity derivative financial instruments are used to reduce the impact of natural gas and oil price fluctuations.
Significant changes in these estimates could result in a change to our estimated reserves, which could lead to a material change to our production depletion expense. Derivative Financial Instruments. Our commodity derivative financial instruments are used to reduce the impact of oil and natural gas price fluctuations.
We define Adjusted Net Income (Loss) as net income (loss) adjusted for unrealized loss (gain) on commodity derivative instruments, acquisition & divestiture related expenses, unusual and infrequent items, and the income tax expense or benefit of these adjustments using our federal statutory tax rate.
Adjusted Net Income (Loss) We define Adjusted Net Income (Loss) as net income (loss) adjusted for unrealized loss (gain) on commodity derivative instruments, acquisition & divestiture related expenses, unusual and infrequent items, and the income tax expense or benefit of these adjustments using our federal statutory tax rate.
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.
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. 64 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.
Significant changes to the market value of derivative instruments due to the volatility of oil and natural gas prices can have an impact on our financial condition and results of operations. Contingencies and Insurance Accounting.
Significant changes to the market value of derivative instruments due to the volatility of oil and natural gas prices can have an impact on our financial condition and results of operations. Contingencies Accounting.
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.
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. 65 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.
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.
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, 2024 (“ 2024 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.”
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.
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.
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; ● 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. 70 Table of Contents Less: ● Interest income; ● Income tax benefit; ● Gain on expired commodity derivative instruments; ● Cash settlements paid on expired commodity derivative instruments; ● Gains on sale of assets and other, net; and ● Other non-routine items that we deem appropriate.
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.
We cannot assure you that operations and other needed capital will be available on acceptable terms, or at all. We anticipate funding our 2026 capital program from cash on hand and 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.
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.
We anticipate funding our 2026 capital program from internally generated cash flow and cash on hand. 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.
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.
These are costs incurred to deliver production of our oil, natural gas, and NGLs to the market. Cost levels of these expenses can vary based on the volume of oil, natural gas, and NGLs production. ● Taxes other than income . These consist of production, ad valorem, NOx credits, and franchise taxes.
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, 2024 compared to the year ended December 31, 2023 Information related to the comparison of our discussion of the results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023, 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.
For the year ended December 31, 2024 compared to the year ended December 31, 2023 Information related to the comparison of our discussion of the cash flows for the year ended December 31, 2024 compared to the year ended December 31, 2023, is included in “Item 7.
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.
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.
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.
Current income tax (expense) benefit was $1.4 million and ($0.2) million for the year ended December 31, 2025 and 2024, respectively. See additional information discussed in Note 18 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.
Deferred income tax benefit (expense) was ($18.2) million and ($2.2) million for the year ended December 31, 2025 and 2024, respectively. See additional information discussed in Note 18 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
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 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 25%−75%, depending on availability under the Revolving Credit Facility, of our estimated production from proved developed producing reserves over a one-year period at any given point of time.
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.
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.
Our business activities are conducted through OLLC, our wholly owned subsidiary, and its wholly owned subsidiaries. Our assets consist primarily of producing oil and natural gas properties located in Oklahoma, the Rockies (“Bairoil”), federal waters offshore Southern California (“Beta”), East Texas/North Louisiana and Eagle Ford.
Our business activities are conducted through OLLC, our wholly owned subsidiary, and its wholly owned subsidiaries. Our assets have historically consisted primarily of producing oil and natural gas properties located in Oklahoma, the Rockies (“Bairoil”), federal waters offshore Southern California (“Beta”), East Texas/North Louisiana, and the Eagle Ford (Non-op).
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.
The charts below detail the allocation of capital by investment type based on the midpoint of our 2026 capital expenditure range. ​ 2026 CAPEX by Investment ​ 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.
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.
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 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.
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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” of our 2024 Form 10-K filed with the SEC and is incorporated by reference into this Annual Report. 75 Table of Contents Capital Requirements See “— Outlook” for additional information regarding our capital spending program for 2026.
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.
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.
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.
Production Volumes Production volumes directly impact our results of operations. For more information about our volumes, see “— Results of Operations” below. 61 Table of Contents 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.
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.
Based on our current oil 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 2026 development activities.
On a per Boe basis, taxes other than income were $2.92 and $3.02 for the year ended December 31, 2024 and 2023, respectively.
On a per Boe basis, taxes other than income were $2.36 and $2.92 for the year ended December 31, 2025 and 2024, respectively.
We intend 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 total proved developed producing reserves over a one-to-three-year period at any given point of time.
We intend to enter into commodity derivative contracts at times and on terms desired to maintain a portfolio of commodity derivative contracts covering at least 25%−75%, depending on availability under the Revolving Credit Facility, of our estimated production from total proved developed producing reserves over a one-year period at any given point of time.
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 .
Additions to restricted investments were $10.2 million for the year ended December 31, 2025 compared to $10.1 million for the year ended December 31, 2024. Financing Activities .
Net cash used in investing activities for the year ended December 31, 2024 was $82.0 million, of which $72.2 million was used for additions to oil and natural gas properties and $1.1 million used for additions to other property and equipment.
Net cash used in investing activities for the year ended December 31, 2024, was $82.0 million, of which $72.2 million was used for additions to oil and natural gas properties and $1.1 million used for additions to other property and equipment. During 2025, the Company generated significant investing cash inflows from asset divestitures.
We believe that Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure.
We are required to comply with certain Adjusted EBITDA-related metrics under our Revolving Credit Facility. We believe that Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure.
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.
Net cash provided by operating activities for the year ended December 31, 2025 included $16.8 million of cash received on expired derivative instruments, partially offset by $0.1 million of cash payments on terminated derivatives instruments compared to $17.6 million of cash received on expired derivative instruments and $0.8 million of cash received on terminated derivatives instruments for the year ended December 31, 2024.
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.
Key drivers of net operating cash flows are commodity prices, production volumes, and operating costs. Net cash provided by operating activities was $49.2 million and $51.3 million for the year ended December 31, 2025 and 2024, respectively.
For the year ended December 31, 2024, other revenues consisted of iodine sales of $2.4 million, service revenues of $3.1 million with respect to our wholly owned subsidiary, Magnify Energy Services (“Magnify”), and interest income of $0.9 million earned on our sinking fund escrow accounts.
For the year ended December 31, 2025, other revenues consisted of iodine sales of $2.7 million and service revenues of $4.1 million with respect to our wholly owned subsidiary, Magnify Energy Services (“Magnify”). For the year ended December 31, 2024, other revenues consisted of iodine sales of $2.4 million, and service revenues of $3.1 million for Magnify.
For the year ended December 31, 2023, in East Texas, we sold a small working interest in certain acreage for $1.2 million and an override royalty interest. Various restricted investment accounts fund certain long-term contractual and regulatory asset retirement obligations and collateralize certain regulatory bonds associated with our offshore Beta properties.
For the year ended December 31, 2024, in East Texas we sold some undeveloped acreage recognizing a gain of $1.4 million. Various restricted investment accounts fund certain long-term contractual and regulatory asset retirement obligations and collateralize certain regulatory bonds associated with our offshore Beta properties.
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.
Financial Statements and Supplementary Data” contained herein. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ (In thousands) Net cash provided by operating activities ​ $ 49,200 ​ $ 51,293 Net cash provided by (used in) investing activities ​ 141,298 ​ (82,034) Net cash provided by (used in) financing activities ​ (129,832) ​ 9,995 ​ For the year ended December 31, 2025 compared to the year ended December 31, 2024 Operating Activities.
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.
We had net repayments under our Revolving Credit Facility of $127.0 million for the year ended December 31, 2025, compared to net borrowings of $12.0 million for the year ended December 31, 2024.
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.
On a per Boe basis, lease operating expense was $20.99 and $20.01 for the year ended December 31, 2025 and 2024, respectively. Gathering, processing and transportation expenses were $17.8 million and $18.4 million for the year ended December 31, 2025 and 2024, respectively.
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.
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.
These costs also include capitalized interest, the amortization and write off of deferred financing costs and the amortization of surety bonds. ● Income tax expense. We are a corporation subject to federal and certain state income taxes.
These costs also include capitalized interest, the amortization and write off of deferred financing costs and the amortization of surety bonds. ● Income tax expense.
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.
Pipeline incident loss was $2.4 million and $3.9 million for the year ended December 31, 2025 and 2024. The $2.4 million reflects certain expenses not expected to be recovered under an insurance policy. See Note 17 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
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.
The change in general and administrative expense is primarily related to (i) an increase of $8.3 million in acquisition and divestiture costs, (ii) an increase of $1.5 million in stock compensation expense; (iii) an increase of $1.1 million in bad debt expense, (iv) an increase of $6.4 million in severance expense and (v) an increase of $0.9 million in legal expense; partially offset by (i) a decrease of $1.0 million in salaries and other payroll benefits, and (ii) a decrease of $0.3 million in professional services.
For information regarding the individual components of our cash flow amounts, see the Statements of Consolidated Cash Flows included under “Item 8.
The cash flows for the years ended December 31, 2025 and 2024, 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.
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.
Non-performance by a customer could also result in losses. 73 Table of Contents Capital Expenditures. Our total capital expenditures were approximately $82.3 million for the year ended December 31, 2025, which were primarily related to the development program at Beta and non-operated drilling and completion activities in East Texas and the Eagle Ford. Working Capital.
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.
We are a corporation subject to federal and certain state income taxes. 63 Table of Contents Outlook Based on our current plans, our capital expenditure program for the full year 2026 is expected to be approximately $45.0 million to $65.0 million.
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.
Production and Operation Update Total production for the Company in 2025 was composed of approximately 45% oil, 39% natural gas and 16% NGLs compared to 43% oil, 39% natural gas and 18% NGLs in 2024. The change in our oil production was primarily related to the development of wells at Beta.
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 .
The following table shows the low and high commodity future index prices for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ High ​ ​ ​ Low For the Year Ended December 31, 2025: ​ ​ ​ ​ NYMEX-WTI oil future price range per Bbl ​ $ 80.04 ​ $ 55.27 NYMEX-Henry Hub natural gas future price range per MMBtu ​ $ 5.29 ​ $ 2.70 ICE Brent oil future price range per Bbl ​ $ 82.03 ​ $ 58.92 ​ 62 Table of Contents Commodity Derivative Contracts .
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.
On a per Boe basis, gathering, processing and transportation expenses were $2.64 and $2.58 for the year ended December 31, 2025 and 2024, respectively. The decrease in gathering, processing and transportation expense was primarily driven by lower volumes. Taxes other than income were $15.9 million and $20.9 million for the year ended December 31, 2025 and 2024, respectively.
Merger with Juniper Capital On January 14, 2025, we entered into the Merger Agreement with the Merger Subs, the Acquired Companies, and, solely for the limited purposes set forth in the Merger Agreement, Juniper and the Specified Company Entities set forth on Annex A thereto, pursuant to which, at the Effective Time, (a) NPOG will merge with and into First Merger Sub, with NPOG surviving the merger as an indirect, wholly owned subsidiary of the Company and (b) COG will merge with and into Second Merger Sub, with COG surviving the merger as an indirect, wholly owned subsidiary of the Company, in each case, subject to the terms and conditions of the Merger Agreement.
(“Juniper Capital”) and the Specified Company Entities set forth on Annex A thereto, pursuant to which, at the effective time of the Contemplated Mergers (as defined below), it was contemplated that (i) NPOG would merge with and into First Merger Sub, with NPOG surviving the merger as an indirect, wholly owned subsidiary of the Company and (ii) COG would merge with and into Second Merger Sub, with COG surviving the merger as an indirect, wholly owned subsidiary of the Company, in each case, subject to the terms and conditions of the Merger Agreement (clauses (i) and (ii), together, the “Contemplated Mergers”).
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.
For the year ended December 31, 2025, we had a net gain on commodity derivative instruments of $28.4 million compared to a net loss of $2.0 million for the year ended December 31, 2024. In addition, the Company paid $2.0 million pursuant to a settlement with PHMSA.
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.
Interest expense, net was $15.6 million and $14.6 million for the year ended December 31, 2025 and 2024, respectively. The change was primarily related to $1.5 million for write-off of deferred issuance costs. Average outstanding borrowings under our Revolving Credit Facility were $124.9 million and $120.9 million for the year ended December 31, 2025 and 2024, respectively.
Our hedging activities are intended to support oil, NGL and natural gas prices at targeted levels and to manage our exposure to commodity price fluctuations.
Commodity hedging has been and remains an important part of our strategy to reduce cash flow volatility. Our hedging activities are intended to support oil prices at targeted levels and to manage our exposure to commodity price fluctuations.
The comparability of the results of operations among the periods presented below is impacted by the suspension of operations at our Beta properties for the first half of 2023. 73 Table of Contents The table below summarizes certain of the results of operations and period-to-period comparisons for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2024 2023 ​ ​ ($ 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 $392.8 million was recorded for the year ended December 31, 2024 and 2023, respectively.
As a result of the factors listed above, the historical results of operations and period-to-period comparisons of these results and certain financial data may not be comparable or indicative of future results. 66 Table of Contents The table below summarizes certain of the results of operations and period-to-period comparisons for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ($ In thousands) Oil and natural gas sales ​ $ 256,097 ​ $ 282,992 Other revenues ​ ​ 7,264 ​ ​ 11,689 Lease operating expense ​ 141,324 ​ 142,950 Gathering, processing and transportation ​ 17,795 ​ 18,427 Taxes other than income ​ 15,870 ​ 20,895 Depreciation, depletion and amortization ​ 32,484 ​ 32,586 Impairment expense ​ 42,450 ​ — General and administrative expense ​ 52,056 ​ 35,895 Loss (gain) on commodity derivative instruments ​ (28,397) ​ 2,047 Pipeline incident loss ​ ​ 2,423 ​ ​ 3,859 (Gain) loss on sale of properties ​ ​ (99,548) ​ ​ (1,367) Interest expense, net ​ 15,577 ​ 14,599 Income tax (expense) benefit - current ​ ​ 1,377 ​ ​ (232) Income tax (expense) benefit - deferred ​ (18,248) ​ (2,196) Net income (loss) ​ 43,968 ​ 12,946 ​ ​ ​ ​ ​ ​ ​ Oil and natural gas revenues: ​ ​ ​ ​ Oil sales ​ $ 182,764 ​ $ 220,380 NGL sales ​ 21,379 ​ 26,789 Natural gas sales ​ 51,954 ​ 35,823 Total oil and natural gas revenues ​ $ 256,097 ​ $ 282,992 ​ ​ ​ ​ ​ ​ ​ Production volumes: ​ ​ ​ ​ Oil (MBbls) ​ 3,008 ​ 3,060 NGLs (MBbls) ​ 1,067 ​ 1,278 Natural gas (MMcf) ​ 15,948 ​ 16,836 Total (MBoe) ​ 6,733 ​ 7,144 Average net production (MBoe/d) ​ 18.4 ​ 19.5 ​ ​ ​ ​ ​ ​ ​ Average realized sales price (excluding commodity derivatives): ​ ​ ​ ​ Oil (per Bbl) ​ $ 60.76 ​ $ 72.01 NGL (per Bbl) ​ 20.03 ​ 20.96 Natural gas (per Mcf) ​ 3.26 ​ 2.13 Total (per Boe) ​ $ 38.03 ​ $ 39.61 ​ ​ ​ ​ ​ ​ ​ Average unit costs per Boe: ​ ​ ​ ​ Lease operating expense ​ $ 20.99 ​ $ 20.01 Gathering, processing and transportation ​ 2.64 ​ 2.58 Taxes other than income ​ 2.36 ​ 2.92 General and administrative expense ​ 7.73 ​ 5.02 Depletion, depreciation and amortization ​ 4.82 ​ 4.56 ​ For the year ended December 31, 2025 compared to the year ended December 31, 2024 Net income of $44.0 million compared to net income of $12.9 million was recorded for the year ended December 31, 2025 and 2024, respectively. 67 Table of Contents Oil, natural gas and NGL revenues were $256.1 million and $283.0 million for the year ended December 31, 2025 and 2024, respectively.
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.
We had a decrease of 10% in oil and natural gas sales primarily due to lower volumes and decrease in oil prices. Average realized sales price per Boe was $38.03 for 2025 compared to $39.61 for 2024. Our estimated proved reserves decreased to 38.1 MMBoe in 2025 compared to 93.0 MMBoe in 2024.
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.
(Gain) loss on sale of properties was a gain of ($99.5) million and ($1.4) million for the year ended December 31, 2025 and 2024. See additional information discussed in Note 4 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
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.
As of December 31, 2025, 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 9 of the Notes to Consolidated Financial Statements included under “Item 8.
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.
Net losses on commodity derivative instruments of $2.0 million were recognized for the year ended December 31, 2024, and consisted of a $20.5 million decrease in the fair value of open positions, partially offset by $0.8 million of cash settlements received on terminated derivative instruments and $17.6 million in cash settlements received on expired positions. 68 Table of Contents Given the volatility of commodity prices, it is not possible to predict future reported unrealized mark-to-market net gains or losses and the actual net gains or losses that will ultimately be realized upon settlement of the hedge positions in future years.
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.
Production volumes decreased to 18.4 MBoe/d in 2025 from 19.5 MBoe/d in 2024, and the average realized sales price decreased to $38.03 per Boe in 2025 from $39.61 per Boe in 2024. The change in realized sales price was due to lower realized sales prices for oil, partially offset by higher realized sales prices for natural gas.
The oil produced from our offshore properties is heavy and sour oil and was sold based on refiners’ posted prices for California Midway-Sunset for the year ended December 31, 2024. Effective January 1, 2025, offshore production will be sold based on posted prices for ICE Brent. 69 Table of Contents Price Volatility .
The oil produced from our offshore properties is heavy and sour oil and was sold based on refiners’ posted prices for ICE Brent for the year ended December 31, 2025. Price Volatility . In the past, oil and natural gas prices have been extremely volatile, and we expect this volatility to continue.
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 .
As of December 31, 2025, we had working capital (excluding commodity derivatives) of $57.1 million primarily as the result of (i) a cash and cash equivalents balance of $60.7 million, (ii) an accounts receivable balance of $30.1 million and (iii) prepaid expenses and other current assets balance of $24.4 million, partially offset by (i) an accrued liabilities balance of $34.5 million, (ii) an accounts payable balance of $17.9 million, and (iii) a revenues payable balance of $5.6 million.
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 was primarily related to a reduction in production taxes due to lower volumes, the divestiture of our non-operated Eagle Ford assets, lower year-over-year revenues and a decrease in waste emission charges. DD&A expense was $32.5 million and $32.6 million for the year ended December 31, 2025 and 2024, respectively.
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.
General and administrative expense was $52.1 million and $35.9 million for the year ended December 31, 2025 and 2024, respectively.
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.
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. 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.
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.
Net cash provided by investing activities for the year ended December 31, 2025 was $141.3 million, of which $84.3 million was used for additions to oil and natural gas properties and $1.0 million was used for additions to other property and equipment.
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.
See Note 17 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report. Investing Activities.
At December 31, 2024, the aggregate principal amount of loans outstanding under the Revolving Credit Facility was $127.0 million.
At December 31, 2025, the Company had no loans outstanding under the Revolving Credit Facility. As of December 31, 2025, we had approximately $15.0 million of available borrowings under our Revolving Credit Facility.
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.
Average net production volumes were approximately 18.4 MBoe/d and 19.5 MBoe/d for the year ended December 31, 2025 and 2024, respectively. The average realized sales price was $38.03 per Boe and $39.61 per Boe for the year ended December 31, 2025 and 2024, respectively.
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.
Results of Operations The results of operations for the years ended December 31, 2025 and 2024 have been derived from our Consolidated Financial Statements.
Additionally, for the year ended December 31, 2024, we recorded a revenue suspense release of $4.8 million. For the year ended December 31, 2023, other revenues were primarily related to our receipt of LOPI insurance proceeds of $17.9 million, Magnify service revenue of $0.6 million and iodine sales of $0.2 million.
Additionally, for the year ended December 31, 2024, we recorded a revenue suspense release of $4.8 million. Lease operating expense was $141.3 million and $143.0 million for the year ended December 31, 2025 and 2024, respectively.
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.
Adjusted Net Income (Loss) is not considered to be an alternative to net income (loss) reported in accordance with GAAP. 69 Table of Contents Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ (In thousands) Net (loss) income ​ $ 43,968 ​ $ 12,946 Unrealized loss (gain) on commodity derivative instruments ​ ​ (12,235) ​ 20,457 Acquisition and divestiture-related expenses ​ ​ 9,890 ​ ​ 1,633 Impairment expense ​ ​ 42,450 ​ ​ — Non-recurring costs: ​ ​ ​ ​ ​ ​ (Gain) loss on sale of properties ​ ​ (99,548) ​ ​ (1,367) Tax effect of adjustments (1) ​ ​ 9,914 ​ ​ (56) Adjusted net income (loss) ​ $ (5,561) ​ $ 33,613 (1) The federal statutory rates were utilized for all periods presented. ​ Adjusted EBITDA 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.
Those estimates may change substantially depending on information about the nature and extent of contamination, appropriate remediation technologies and regulatory approvals. An insurance receivable is recognized when collection of the receivable is deemed probable. Any recognition of an insurance receivable is recorded by crediting and offsetting the original charge.
Those estimates may change substantially depending on information about the nature and extent of contamination, appropriate remediation technologies and regulatory approvals. We believe contingencies accounting is a critical accounting estimate because we must assess the probability of the loss related to the contingency. Income Tax.
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. As of December 31, 2024, our future commitments under this agreement were $9.0 million per year for years 2025 through 2033.
As of December 31, 2025, our future commitments under this agreement were $9.0 million per year for years 2026 through 2033. See Note 17 of the Notes to Consolidated Financial Statements included under “Item 8.
If the Merger Agreement is terminated by any party in accordance with clause (a) or by the Acquired Companies in accordance with clause (b) above and the Amplify Termination Fee is not otherwise payable in accordance with the terms and conditions of the Merger Agreement, then Amplify Energy will be required to reimburse the Acquired Companies’ incurred expenses, up to a maximum aggregate amount of $800,000.
In accordance with the terms of the Termination Agreement, the Company made a cash payment to the Acquired Companies in lieu of any termination fee which might have otherwise been payable pursuant to the Merger Agreement in the amount of $800,000 as payment for certain of the Acquired Companies’ expenses.
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.
The change in average realized sales price was due to lower realized sales prices for oil, partially offset by higher realized sales prices for natural gas. Other revenues were $7.3 million and $11.7 million for the year ended December 31, 2025 and 2024, respectively.
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.
The decrease was primarily due to 53.2 MMBoe for divestitures reserves. In addition, the change in reserves were impacted by changes in commodity prices, partially offset by upward reserves revisions due to performance, and reserve additions due to new locations specifically related to Beta.
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.
Acquisition and divestiture related expenses included in general and administrative expenses included the following for the periods indicated below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2025 ​ ​ ​ 2024 Cost incurred related to the contemplated merger with Juniper Capital ​ $ 2,769 ​ $ 1,383 Cost incurred related to the EQV Asset Sale and the Revolution Asset Sale ​ ​ 5,399 ​ ​ — Other acquisition and divestitures expenses ​ ​ 1,722 ​ ​ 250 ​ ​ $ 9,890 ​ $ 1,633 ​ Net loss (gain) on commodity derivative instruments for the year ended December 31, 2025 was a gain of $28.4 million which consisted of a $12.2 million increase in the fair value of open positions and $16.8 million in cash settlements received on expired positions, partially offset by $0.6 million in cash settlements paid on terminated derivative instruments.
On October 25, 2024, we entered into the Credit Agreement Amendment, which among other things, (i) reduced the borrowing base under the Revolving Credit Facility from $150.0 million to $145.0 million, (ii) increased the aggregate elected commitments under the Revolving Credit Facility from $135.0 million to $145.0 million and (iii) amended certain interest rates applicable to loans under the Revolving Credit Facility.
Debt Agreements Revolving Credit Facility . On December 31, 2025, OLLC, as borrower, amended the Revolving Credit Facility with Citizens Bank, as administrative agent to, among other things: (i) set the Borrowing Base to $25.0 million with elected commitments of $15.0 million and (ii) extend the maturity date under the Credit Agreement to December 31, 2028.

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