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What changed in Permian Resources Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Permian Resources 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.

+327 added−433 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-26)

Top changes in Permian Resources Corp's 2025 10-K

327 paragraphs added · 433 removed · 258 edited across 6 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

93 edited+22 added−40 removed183 unchanged
Biggest changeHistorically, oil, natural gas and NGL prices have been volatile and subject to fluctuations relating to a variety of additional factors that are beyond our control, including: • worldwide and regional economic conditions impacting the global supply of and demand for oil, natural gas and NGLs; • the price and quantity of foreign imports of oil, natural gas and NGLs; • political and economic conditions in or affecting other producing regions or countries, including the Middle East, Russia, Eastern Europe, Africa and South America; • actions of OPEC, its members and other state-controlled oil companies relating to oil price and production controls; • actions of U.S., European Union and other governments and governmental organizations relating to Russia’s oil, natural gas and NGLs, including through sanctions, import restrictions and commodity price caps; • actions of U.S. producers, and independent producers operating in other countries, relating to production levels; • political, economic and other conditions that affect perceived or actual demand for oil, natural gas and NGLs, including international conflict, trade disputes, the imposition of tariffs or sanctions and global health concerns; • the level of global exploration, development, production, and inventories; • actions of U.S. and other governments to strategically release oil, natural gas and NGLs from strategic reserves; • the availability of refining and storage capacity; • prevailing prices on local price indexes in the area in which we operate; • the proximity, capacity, cost and availability of gathering and transportation facilities; • the cost of exploring for, developing, producing and transporting reserves; • weather conditions and other natural disasters, including winter storms, hurricanes, droughts, fires, earthquakes, flooding and tornadoes; • terrorist attacks and cybersecurity risks targeting oil and natural gas related facilities and infrastructure; • technological advances affecting fuel economy, energy supply and energy consumption; • the effect of energy conservation measures, alternative fuel requirements and the price and availability of alternative fuels; • laws, regulations and taxes in the U.S. and in foreign jurisdictions that impact the demand for oil, natural gas and NGLs; • shareholder activism or activities by non-governmental organizations to restrict the exploration and production of oil and natural gas so as to minimize emissions of carbon dioxide and methane GHGs or otherwise; • localized and global supply and demand fundamentals; and • expectations about future commodity prices.
Biggest changeHistorically, oil, NGL and natural gas prices have been volatile and subject to fluctuations relating to a variety of additional factors that are beyond our control, including: • worldwide and regional economic conditions impacting the global supply of and demand for oil, NGLs and natural gas; • the price and quantity of foreign imports of oil, NGLs and natural gas; • political and economic conditions in or affecting other producing regions or countries, including the Middle East, Russia, Eastern Europe, Africa and South America, such as the recent developments in Venezuela; • actions of OPEC, its members and other state-controlled oil companies relating to oil price and production controls; • actions of U.S., European Union and other governments and governmental organizations relating to Russia’s oil, NGLs and natural gas, including through sanctions, import restrictions and commodity price caps; • actions of U.S. producers, and independent producers operating in other countries, relating to production levels; • political, economic and other conditions that affect perceived or actual demand for oil, NGLs and natural gas, including international conflict, trade disputes, the imposition of tariffs or sanctions and global health concerns; • the level of global exploration, development, production, and inventories; • actions of U.S. and other governments to strategically release oil, NGLs and natural gas from strategic reserves, including any increased volumes of Venezuelan crude oil; • the availability of refining and storage capacity; • prevailing prices on local price indexes in the area in which we operate; • the proximity, capacity, cost and availability of gathering and transportation facilities; • the cost of exploring for, developing, producing and transporting reserves; • weather conditions and other natural disasters, including winter storms, hurricanes, droughts, fires, earthquakes, flooding and tornadoes; • terrorist attacks and cybersecurity risks targeting oil and natural gas related facilities and infrastructure; • technological advances, including AI and its increased use, affecting fuel economy, energy supply and energy consumption; • the effect of energy conservation measures, alternative fuel requirements and the price and availability of alternative fuels; • laws, regulations and taxes in the U.S. and in foreign jurisdictions that impact the demand for oil, NGLs and natural gas; • shareholder activism or activities by non-governmental organizations to restrict the exploration and production of oil and natural gas so as to minimize emissions of carbon dioxide and methane GHGs or otherwise; • localized and global supply and demand fundamentals; and • expectations about future commodity prices.
Risks Related to Commodity Prices Commodity prices are volatile, and a sustained period of low commodity prices for oil, natural gas and NGLs could adversely affect our business, financial condition and results of operations.
Risks Related to Commodity Prices Commodity prices are volatile, and a sustained period of low commodity prices for oil, NGLs and natural gas could adversely affect our business, financial condition and results of operations.
The prices we receive for our oil, natural gas and NGLs heavily influence our revenue, cash flows, profitability, access to capital, future rate of growth and carrying value of our properties.
The prices we receive for our oil, NGLs and natural gas heavily influence our revenue, cash flows, profitability, access to capital, future rate of growth and carrying value of our properties.
Oil, natural gas and NGLs are commodities, and their prices may fluctuate widely in response to relatively minor changes in the actual and expected supply of and demand for oil, natural gas and NGLs and market uncertainty.
Oil, NGLs and natural gas are commodities, and their prices may fluctuate widely in response to relatively minor changes in the actual and expected supply of and demand for oil, NGLs and natural gas and market uncertainty.
If our revenues or the borrowing base under OpCo’s revolving credit facility decrease as a result of lower oil, natural gas and NGL prices, operating difficulties, declines in reserves or for any other reason, we may have limited ability to obtain the capital necessary to sustain our operations at current levels.
If our revenues or the borrowing base under OpCo’s revolving credit facility decrease as a result of lower oil, NGL and natural gas prices, operating difficulties, declines in reserves or for any other reason, we may have limited ability to obtain the capital necessary to sustain our operations at current levels.
Our ability to produce crude oil, natural gas and NGLs economically and in commercial quantities could be impaired if we are unable to recycle or dispose of the produced water we produce in an economical and environmentally safe manner.
Our ability to produce crude oil, NGLs and natural gas economically and in commercial quantities could be impaired if we are unable to recycle or dispose of the produced water we produce in an economical and environmentally safe manner.
As a result of this concentration, we may be disproportionately exposed to the impact of regional supply and demand factors, delays or interruptions of production from wells in this area caused by governmental regulation, processing or transportation capacity constraints, market limitations, availability of equipment and personnel, water shortages, regional power outages or other drought or extreme weather related conditions or interruption of the processing or transportation of oil, natural gas or NGLs.
As a result of this concentration, we may be disproportionately exposed to the impact of regional supply and demand factors, delays or interruptions of production from wells in this area caused by governmental regulation, processing or transportation capacity constraints, market limitations, availability of equipment and personnel, water shortages, regional power outages or other drought or extreme weather related conditions or interruption of the processing or transportation of oil, NGLs or natural gas.
If these facilities are unavailable, or if we are unable to access these facilities on commercially reasonable terms, our operations could be interrupted and our revenues reduced. The marketability of our oil, natural gas and NGLs production depends in part upon the availability, proximity and capacity of transportation facilities owned by third parties.
If these facilities are unavailable, or if we are unable to access these facilities on commercially reasonable terms, our operations could be interrupted and our revenues reduced. The marketability of our oil, NGLs and natural gas production depends in part upon the availability, proximity and capacity of transportation facilities owned by third parties.
Our oil, natural gas and NGLs production is generally transported from the wellhead by gathering systems that are either owned by us or third-party midstream companies. In general, we do not control the transportation of our production and our access to transportation facilities may be limited or denied.
Our oil, NGLs and natural gas production is generally transported from the wellhead by gathering systems that are either owned by us or third-party midstream companies. In general, we do not control the transportation of our production and our access to transportation facilities may be limited or denied.
Insufficient production from our wells to support the construction of pipeline facilities by our purchasers or third-party midstream companies or a significant disruption in the availability of our or third-party transportation facilities or other production facilities could adversely impact our ability to deliver to market or produce our oil, natural gas and NGLs and thereby cause a significant interruption in our operations.
Insufficient production from our wells to support the construction of pipeline facilities by our purchasers or third-party midstream companies or a significant disruption in the availability of our or third-party transportation facilities or other production facilities could adversely impact our ability to deliver to market or produce our oil, NGLs and natural gas and thereby cause a significant interruption in our operations.
Any such shut-in or curtailment, or an inability to obtain favorable terms for delivery of the oil, natural gas and NGLs produced from our fields, would materially and adversely affect our financial condition and results of operations.
Any such shut-in or curtailment, or an inability to obtain favorable terms for delivery of the oil, NGLs and natural gas produced from our fields, would materially and adversely affect our financial condition and results of operations.
We also have various multi-year agreements that relate to the sale, transportation or gathering of our oil, natural gas and NGLs and may in the future enter into multi-year agreements for contracts for other services.
We also have various multi-year agreements that relate to the sale, transportation or gathering of our oil, NGLs and natural gas and may in the future enter into multi-year agreements for contracts for other services.
We could experience periods of higher costs if commodity prices rise. These increases could reduce our profitability, cash flow and ability to complete development activities as planned. Historically, our capital and operating costs have risen during periods of increasing oil, natural gas and NGL prices.
We could experience periods of higher costs if commodity prices rise. These increases could reduce our profitability, cash flow and ability to complete development activities as planned. Historically, our capital and operating costs have risen during periods of increasing oil, NGL and natural gas prices.
We depend upon a small number of significant purchasers for the sale of most of our oil, natural gas and NGL production. We normally sell production to a relatively small number of customers, as is customary in our business.
We depend upon a small number of significant purchasers for the sale of most of our oil, NGL and natural gas production. We normally sell production to a relatively small number of customers, as is customary in our business.
Even if we accurately predict sudden changes, our ability to negate the risk may be limited depending upon market conditions. Since our production is not fully hedged, and we are also exposed to fluctuations in oil, natural gas and NGL prices as it relates to the price we receive from the sale of our unhedged volumes.
Even if we accurately predict sudden changes, our ability to negate the risk may be limited depending upon market conditions. Since our production is not fully hedged, and we are also exposed to fluctuations in oil, NGL and natural gas prices as it relates to the price we receive from the sale of our unhedged volumes.
These provisions include: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the ability of our board of directors to determine whether to issue shares of our preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by the chairman of the board of directors, the chief executive officers, or the board of directors pursuant to a resolution adopted by a majority of the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • limiting the liability of, and providing indemnification to, our directors and officers; • controlling the procedures for the conduct and scheduling of stockholder meetings; • providing that directors may be removed prior to the expiration of their terms by stockholders only for cause; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.
These provisions include: 38 Table of Contents • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the ability of our board of directors to determine whether to issue shares of our preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by the chairman of the board of directors, the chief executive officers, or the board of directors pursuant to a resolution adopted by a majority of the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • limiting the liability of, and providing indemnification to, our directors and officers; • controlling the procedures for the conduct and scheduling of stockholder meetings; • providing that directors may be removed prior to the expiration of their terms by stockholders only for cause; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.
The amount of cash that our operating subsidiaries can distribute each quarter principally depends upon the amount of cash generated from operations, which may fluctuate from quarter to quarter based on, among other things: • the amount of oil and natural gas our operating subsidiaries produce from existing wells; • market prices of oil, natural gas and NGLs; • any restrictions on the payment of distributions contained in covenants in OpCo’s revolving credit facility; • our operating subsidiaries’ ability to fund their drilling and development plans; 41 Table of Contents • the levels of investments in each of our operating subsidiaries, which may be limited and disparate; • the levels of operating expenses, maintenance expenses and general and administrative expenses; • regulatory action affecting the supply of, or demand for, oil, natural gas and NGLs, and operating costs and operating flexibility; • prevailing economic conditions; and • adverse weather conditions and natural disasters.
The amount of cash that our operating subsidiaries can distribute each quarter principally depends upon the amount of cash generated from operations, which may fluctuate from quarter to quarter based on, among other things: • the amount of oil and natural gas our operating subsidiaries produce from existing wells; • market prices of oil, NGLs and natural gas; • any restrictions on the payment of distributions contained in covenants in OpCo’s revolving credit facility; • our operating subsidiaries’ ability to fund their drilling and development plans; • the levels of investments in each of our operating subsidiaries, which may be limited and disparate; • the levels of operating expenses, maintenance expenses and general and administrative expenses; • regulatory action affecting the supply of, or demand for, oil, NGLs and natural gas, and operating costs and operating flexibility; 37 Table of Contents • prevailing economic conditions; and • adverse weather conditions and natural disasters.
Some of the factors affecting integration will be outside of our control, and any one of them could result in increased costs and diversion of management’s time and energy, and could materially and adversely affect our revenues. We are heavily dependent on our information technology systems and other digital technologies.
Some of the factors affecting integration will be outside of our control, and any one of them could result in increased costs and diversion of management’s time and energy, and could materially and adversely affect our revenues. We are heavily dependent on our information and operational technology systems and other digital technologies.
While we maintain insurance that covers certain cybersecurity incidents, we may not be insured for, or our insurance may be insufficient to protect us against, particular types of cybersecurity risks, and, in the future, such insurance may not continue to be available to us on reasonable terms, if at all.
While we endeavor to maintain insurance that covers certain cybersecurity incidents, we may not be insured for, or our insurance may be insufficient to protect us against, particular types of cybersecurity risks, and, in the future, such insurance may not continue to be available to us on reasonable terms, if at all.
Increases in interest rates could adversely affect our business. Our business and operating results can be harmed by factors such as the availability, terms of and cost of capital, increases in interest rates, as a result of inflation or otherwise, or a reduction in credit rating.
Increases in interest rates could adversely affect our business. Our business and operating results can be harmed by factors such as the availability, terms of and cost of capital, increases in interest rates, as a result of elevated rates of inflation or otherwise, or a reduction in credit rating.
In addition, sustained periods of low commodity prices for oil and natural gas and the resultant effect such prices may have on our drilling economics and our ability to raise capital may require us to re-evaluate and postpone, moderate or eliminate our planned drilling and 26 Table of Contents completions operations, or suspend production from current wells, which could result in the reduction of our expected production and some of our proved undeveloped reserves and related standardized measure.
In addition, sustained 23 Table of Contents periods of low commodity prices for oil and natural gas and the resultant effect such prices may have on our drilling economics and our ability to raise capital may require us to re-evaluate and postpone, moderate or eliminate our planned drilling and completions operations, or suspend production from current wells, which could result in the reduction of our expected production and some of our proved undeveloped reserves and related standardized measure.
Our ability to effectively manage and operate our business depends significantly on information technology systems and other digital technologies. The availability and integrity of these systems and technologies are essential for us to conduct our business and operations.
Our ability to effectively manage and operate our business depends significantly on information and operational technology systems and other digital technologies. The availability and integrity of these systems and technologies are essential for us to conduct our business and operations.
However, any such adverse regulatory developments are expected to have no more than a minimal impact on our results, given our limited exposure of leases on federal lands.
However, any such adverse developments are expected to have no more than a minimal impact on our results, given our limited exposure of leases on federal lands.
To the extent that we need funds and OpCo or its subsidiaries are restricted from making such distributions or payments under applicable law or regulation or under the terms of any current or future indebtedness agreements or the Seventh Amended and Restated Limited Liability Company Agreement of OpCo, or are otherwise unable to provide such funds, our liquidity and financial condition could be materially adversely affected.
To the extent that we need funds and OpCo or its subsidiaries are restricted from making such distributions or payments under applicable law or regulation or under the terms of any current or future indebtedness agreements or the Eighth Amended and Restated Limited Liability Company Agreement of OpCo, or are otherwise unable to provide such funds, our liquidity and financial condition could be materially adversely affected.
See Note 1—Basis of Presentation and Summary of Significant Accounting Policies under Part II, Item 8 of this Annual Report for significant purchasers that accounted for more than 10% of our revenues for the years ended December 31, 2024, 2023 and 2022. The loss of any of our major purchasers could materially and adversely affect our revenues in the near-term.
See Note 1—Basis of Presentation and Summary of Significant Accounting Policies under Part II, Item 8 of this Annual Report for significant purchasers that accounted for more than 10% of our revenues for the years ended December 31, 2025, 2024 and 2023. The loss of any of our major purchasers could materially and adversely affect our revenues in the near-term.
Certain of our undeveloped leasehold acreage is subject to leases that will expire over the next several years unless production is established on units containing the acreage, the primary term is extended through continuous drilling provisions or the leases are renewed. As of December 31, 2024, over 96% of our total net acreage was held by production.
Certain of our undeveloped leasehold acreage is subject to leases that will expire over the next several years unless production is established on units containing the acreage, the primary term is extended through continuous drilling provisions or the leases are renewed. As of December 31, 2025, over 96% of our total net acreage was held by production.
We may be unable to obtain required capital or financing on satisfactory terms, which could lead to a decline in our ability to access or grow production and reserves. The oil and natural gas industry is capital-intensive. We make and expect to continue to make substantial capital expenditures related to development and acquisition projects.
We may be unable to obtain required capital or financing on satisfactory terms, or at all, which could lead to a decline in our ability to access or grow production and reserves. The oil and natural gas industry is capital-intensive. We make and expect to continue to make substantial capital expenditures related to development and acquisition projects.
In the event of such default: • the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest; • the lenders under OpCo’s revolving credit facility could elect to terminate their commitments thereunder, cease making further loans and institute foreclosure proceedings against our assets; and 35 Table of Contents • we could be forced into bankruptcy or liquidation.
In the event of such default: • the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest; • the lenders under OpCo’s revolving credit facility could elect to terminate their commitments thereunder, cease making further loans and institute foreclosure proceedings against our assets; and • we could be forced into bankruptcy or liquidation.
In addition, OpCo’s Credit Agreement requires us to maintain certain financial ratios or to reduce our indebtedness if we are unable to comply with such ratios. As of December 31, 2024, we were in full compliance with such financial ratios and covenants.
In addition, OpCo’s Credit Agreement requires us to maintain certain financial ratios or to reduce our indebtedness if we are unable to comply with such ratios. As of December 31, 2025, we were in full compliance with such financial ratios and covenants.
Please refer to Regulation of the Oil and Natural Gas Industry in Part I, Items 1 and 2 of this Annual Report for further discussion on the topics referenced above and additional information on existing and proposed laws, regulations, treaties and international pledges intended to address GHGs and other climate change issues.
Please refer to Regulation of the Oil and Natural Gas Industry in Part I, Items 1 and 2 of this Annual Report for further discussion on the topics referenced above and additional information on existing and proposed laws, regulations and international initiatives intended to address GHGs and other climate change issues.
Inspections may not always be performed on every well, and environmental problems, such as groundwater 32 Table of Contents contamination, are not necessarily observable even when an inspection is undertaken. Even when problems are identified, the seller may be unwilling or unable to provide effective contractual protection against all or part of the problems.
Inspections may not always be performed on every well, and environmental problems, such as groundwater contamination, are not necessarily observable even when an inspection is undertaken. Even when problems are identified, the seller may be unwilling or unable to provide effective contractual protection against all or part of the problems.
In addition to the risks we face in drilling for and producing oil and natural gas, some factors that may directly or indirectly negatively impact our scheduled operations: • lack of available gathering or transportation facilities or delays in constructing such facilities; • abnormal pressure or irregularities in geological formations; • shortages of or delays in obtaining equipment, qualified personnel, materials or resources; • equipment failures, accidents or other unexpected operational events; • delays imposed by or resulting from compliance with laws, regulations or litigation, including limitations resulting from wastewater disposal, emission of GHGs and limitations on hydraulic fracturing; • environmental hazards, such as oil and natural gas leaks, oil spills, pipeline and tank ruptures and unauthorized discharges of brine, well stimulation and completion fluids, toxic gases or other pollutants into the surface and subsurface environment; • natural disasters and other weather events; • personal injuries and death; • terrorist attacks and cybersecurity risks targeting oil and natural gas related facilities and infrastructure; • limited availability of financing at acceptable terms; • title problems; and • limitations in the market for oil and natural gas. 29 Table of Contents We are not insured against all risks.
In addition to the risks we face in drilling for and producing oil and natural gas, some factors that may directly or indirectly negatively impact our scheduled operations include: • lack of available gathering or transportation facilities or delays in constructing such facilities; • abnormal pressure or irregularities in geological formations; • shortages of or delays in obtaining equipment, qualified personnel, materials or resources; • equipment failures, accidents or other unexpected operational events; • delays imposed by or resulting from compliance with laws, regulations or litigation, including limitations resulting from wastewater disposal, emission of GHGs and limitations on hydraulic fracturing; • environmental hazards, such as oil and natural gas leaks, oil spills, pipeline and tank ruptures and unauthorized discharges of brine, well stimulation and completion fluids, toxic gases or other pollutants into the surface and subsurface environment; • natural disasters and other weather events; • personal injuries and death; • terrorist attacks and cybersecurity risks targeting oil and natural gas related facilities and infrastructure; • limited availability of financing at acceptable terms; • title problems; and • limitations in the market for oil and natural gas.
Voluntary disclosures regarding ESG matters, as well as any ESG disclosures mandated by law, could result in private litigation or government investigation or enforcement action regarding the sufficiency or validity of such disclosures.
Voluntary disclosures regarding sustainability matters, as well as any sustainability disclosures mandated by law, could result in private litigation or government investigation or enforcement action regarding the sufficiency or validity of such disclosures.
Historically, we have funded our capital expenditures with cash flows from operations, borrowings under OpCo’s revolving credit facility, proceeds from offering debt and equity securities and divestitures of non-core assets, and we intend to finance our future capital expenditures in a similar fashion.
Historically, we have funded our capital expenditures with cash flows from operations and may from time to time utilize borrowings under OpCo’s revolving credit facility, proceeds from offering debt and equity securities and divestitures of non-core assets, and we intend to finance our future capital expenditures in a similar fashion.
In 2024, our board of directors authorized a new stock repurchase program of $1 billion of our outstanding common stock, which replaced our previous $500 million stock repurchase program. However, this stock repurchase program may be suspended from ti me to time, modified, extended or discontinued by our board of directors at any time.
In 2024, our board of directors authorized a stock repurchase program to acquire up to $1 billion of our outstanding common stock, which replaced our previous $500 million stock repurchase program. However, this stock repurchase program may be suspended from ti me to time, modified, extended or discontinued by our board of directors at any time.
These factors and the volatility of the energy markets make it extremely difficult to predict future oil, natural gas and NGL price movements with any certainty.
These factors, among others, and the volatility of the energy markets make it extremely difficult to predict future oil, NGL and natural gas price movements with any certainty.
The actual amount and timing of our future capital expenditures may differ materially from our estimates as a result of, among other things, oil, natural gas and NGL prices; actual drilling results; the availability of drilling rigs and other services and equipment; and regulatory, technological and competitive developments.
The actual amount and timing of our future capital expenditures may differ materially from our estimates as a result of, among 25 Table of Contents other things, oil, NGL and natural gas prices; actual drilling results; the availability of drilling rigs and other services and equipment; and regulatory, technological and competitive developments.
The process of integrating acquired businesses, assets and properties may involve unforeseen difficulties and may require a disproportionate amount of our managerial and financial resources. Additionally, the integration of acquisitions is a complex, costly and time-consuming process, and our management may face significant challenges in such process.
The process of integrating acquired businesses, assets and properties may involve 29 Table of Contents unforeseen difficulties and may require a disproportionate amount of our managerial and financial resources. Additionally, the integration of acquisitions is a complex, costly and time-consuming process, and our management may face significant challenges in such process.
Please refer to Regulation of the Oil and Natural Gas 30 Table of Contents Industry in Part I, Items 1 and 2 of this Annual Report for further discussion regarding regulations affecting the handling and disposal of produced water.
Please refer to Regulation of the Oil and Natural Gas Industry in Part I, Items 1 and 2 of this Annual Report for further discussion regarding regulations affecting the handling and disposal of produced water.
Our current and future level of indebtedness could affect our operations in several ways, including the following: • require 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; • limit management’s discretion in operating our business and our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • increase our vulnerability to downturns and adverse developments in our business and the economy generally; • limit our ability to access the capital markets to raise capital on favorable terms or to obtain additional financing for working capital, capital expenditures, acquisitions, general corporate or other expenses or to refinance existing indebtedness; • place restrictions on our ability to obtain additional financing, make investments, lease equipment, sell assets and engage in business combinations; • make it more likely that a reduction in OpCo’s borrowing base following a periodic redetermination could require OpCo to repay a portion of its then-outstanding bank borrowings; • make us vulnerable to increases in interest rates as the indebtedness under OpCo’s revolving credit facility may vary with prevailing interest rates; • place us at a competitive disadvantage relative to our competitors with lower levels of indebtedness in relation to their overall size or less restrictive terms governing their indebtedness; and • make it more difficult for OpCo to satisfy its obligations under its debt and increase the risk that we may default on its debt obligations. 34 Table of Contents We may not be able to generate sufficient cash to service all of OpCo’s indebtedness and may be forced to take other actions to satisfy OpCo’s obligations under applicable debt instruments, which may not be successful.
Our current and future level of indebtedness could affect our operations in several ways, including the following: • require 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; • limit management’s discretion in operating our business and our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • increase our vulnerability to downturns and adverse developments in our business and the economy generally; • limit our ability to access the capital markets to raise capital on favorable terms or to obtain additional financing for working capital, capital expenditures, acquisitions, general corporate or other expenses or to refinance existing indebtedness; • place restrictions on our ability to obtain additional financing, make investments, lease equipment, sell assets and engage in business combinations; • make it more likely that a reduction in OpCo’s borrowing base following a periodic redetermination could require OpCo to repay a portion of its then-outstanding bank borrowings; 31 Table of Contents • make us vulnerable to increases in interest rates as the indebtedness under OpCo’s revolving credit facility may vary with prevailing interest rates; • place us at a competitive disadvantage relative to our competitors with lower levels of indebtedness in relation to their overall size or less restrictive terms governing their indebtedness; and • make it more difficult for OpCo to satisfy its obligations under its debt and increase the risk that we may default on its debt obligations.
Our Fifth Amended and Restated Certificate of Incorporation (as amended and restated, the“Charter”) and Second Amended and Restated Bylaws (as amended and restated, the “Bylaws”) contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors.
Our Amended and Restated Certificate of Incorporation (as amended and restated, the “Charter”) and Second Amended and Restated Bylaws (as amended and restated, the “Bylaws”) contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors.
Alternatively, if a court were to find this choice of forum provision inapplicable to, or unenforceable in 43 Table of Contents respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect its business, financial condition, prospects, or results of operations.
Alternatively, if a court were to find this choice of forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect its business, financial condition, prospects, or results of operations. ITEM 1B.
We cannot assure you that the analogies we draw from available data from other wells, more fully explored prospects or producing fields will be applicable to our drilling prospects. 28 Table of Contents Risks Related to Our Operations Our development and acquisition projects require substantial capital expenditures.
We cannot assure you that the analogies we draw from available data from other wells, more fully explored prospects or producing fields will be applicable to our drilling prospects. Risks Related to Our Operations Our development and acquisition projects require substantial capital expenditures.
Further information about these agreements can be found at Delivery Commitments under Part I, Items 1 and 2 and Note 14—Commitments and Contingencies 31 Table of Contents under Part II, Item 8 of this Annual Report. Any failure by us to satisfy the minimum volume commitments in these agreements could adversely affect our results of operations and financial position.
Further information about these agreements can be found at Delivery Commitments under Part I, Items 1 and 2 and Note 13—Commitments and Contingencies under Part II, Item 8 of this Annual Report. Any failure by us to satisfy the minimum volume commitments in these agreements could adversely affect our results of operations and financial position.
Therefore, our estimated PUDs may not be ultimately developed or produced. As of December 31, 2024, 27% of our total estimated proved reserves were classified as proved undeveloped. Development of these proved undeveloped reserves may take longer and require higher levels of capital expenditures than we currently anticipate.
Therefore, our estimated PUDs may not be ultimately developed or produced. As of December 31, 2025, 29% of our total estimated proved reserves were classified as proved undeveloped. Development of these proved undeveloped reserves may take longer and require higher levels of capital expenditures than we currently anticipate.
As of December 31, 2024, we had entered into derivative contracts covering a portion of our projected oil and gas production through 2026 (refer to Note 8—Derivative Instruments under Part II, Item 8 of this Annual Report for a summary of our derivative instruments as of December 31, 2024).
As of December 31, 2025, we had entered into derivative contracts covering a portion of our projected oil and gas production through 2027 (refer to Note 8—Derivative Instruments under Part II, Item 8 of this Annual Report for a summary of our derivative instruments as of December 31, 2025).
Any failure of these systems to operate effectively and support our operations, challenge in transitioning to new upgraded or replacement systems, difficulty in integrating systems and updates across our growing business, or a breach of these systems could materially and adversely impact the operations of our business.
Any failure of these systems to operate effectively and support our operations, challenge in transitioning to new upgraded or replacement systems, including any implementation or utilization of AI systems, difficulty in integrating systems and updates across our growing business, or a breach of these systems could materially and adversely impact the operations of our business.
As a result, the drilling and production of these potential locations could cause a depletion of our proved reserves and may inhibit our ability to further develop our proved reserves.
As a 26 Table of Contents result, the drilling and production of these potential locations could cause a depletion of our proved reserves and may inhibit our ability to further develop our proved reserves.
Increasing attention from companies’ investors, customers, employees, regulatory bodies and other stakeholders, as well as natural capital and societal expectations, on companies to address climate change, investor and societal expectations regarding voluntary ESG initiatives and disclosures, and consumer demand for alternative sources of energy may result in increased costs (including but not limited to increased costs associated with compliance, stakeholder engagement, contracting, and insurance), reduced demand for our products and our product and services, reduced profits, increased legislative and judicial scrutiny, investigations and litigation, heightened scrutiny of our statements and initiatives, and negative impacts on our stock price and 39 Table of Contents access to capital markets.
Increased attention from companies’ investors, customers, employees, regulatory bodies and other stakeholders, as well as natural capital and societal expectations, on companies to address climate change, investor and societal expectations regarding voluntary or mandatory sustainability initiatives and disclosures, and consumer demand for alternative sources of energy may result in increased costs (including but not limited to increased costs associated with compliance, stakeholder engagement, contracting, and insurance), reduced demand for our products and services, reduced profits, increased legislative and judicial scrutiny, investigations and litigation, heightened scrutiny of our statements and initiatives, and negative impacts on our stock price and access to capital markets.
While we cannot predict the ultimate impact of these changes or whether federal agencies will implement further reforms, any revisions to the federal leasing or permitting process that make it more difficult for us to pursue operations on federal lands may adversely impact our operations.
While we cannot predict the ultimate impact of these changes or whether federal agencies will implement further reforms, any revisions to the federal leasing or permitting process, by executive action, legislation or regulation, that make it more difficult or costly for us to pursue operations on federal lands may adversely impact our operations.
In addition, to the extent our suppliers source their products or raw materials from foreign markets, the cost of such equipment could be impacted by tariffs imposed by the United States on imported goods from countries where these goods are produced.
In addition, to the extent our suppliers source their products or raw materials from foreign markets, the cost of such equipment could be impacted by 28 Table of Contents tariffs or other trade restrictions imposed by the United States on imported goods from countries where these goods are produced.
For example, the TRRC has issued rules that set the requirements for drilling, putting pipe down and cementing wells, testing and reporting obligations, and the disclosure of substances used in the hydraulic fracturing process.
For example, the Railroad Commission of Texas (the “TRRC”) has issued rules that set the requirements for drilling, putting pipe down and cementing wells, testing and reporting obligations, and the disclosure of substances used in the hydraulic fracturing process.
Accordingly, our earnings may fluctuate significantly as a result of changes in fair value of 33 Table of Contents our derivative instruments.
Accordingly, our earnings may fluctuate significantly as a result of changes in fair value of our derivative instruments.
As of December 31, 2024, our aggregate long-term contractual obligation under these agreements was $396.1 million, which represents the gross minimum obligation but does not include amounts that may be due under certain contracts that contain variable pricing or volumetric components as the future obligations cannot be determined.
As of December 31, 2025, our aggregate long-term contractual obligation under our multi-year agreements was $1.5 billion, which represents the gross minimum obligation but does not include amounts that may be due under certain contracts that contain variable pricing or volumetric components as the future obligations cannot be determined.
Our estimated proved reserves as of December 31, 2024, and related standardized measure were calculated under rules of the SEC using twelve-month trailing average benchmark prices of $71.96 per barrel of oil (WTI Posted) and $2.13 per MMBtu (Henry Hub spot), which may be substantially higher or lower than the available spot prices in 2024.
Our estimated proved reserves as of December 31, 2025, and related standardized measure were calculated under rules of the SEC using twelve-month trailing average benchmark prices of $66.01 per barrel of oil (WTI Posted) and $3.39 per MMBtu (Henry Hub spot), which may be substantially higher or lower than the available spot prices in 2025.
Increasing attention to climate change and environmental conservation, for example, may result in demand shifts for our products and additional governmental investigations and private litigation against us.
Increased attention to climate change and environmental conservation, for example, may result in demand shifts for our products and private litigation against us.
Moreover, because we have no independent means of generating revenue, our ability to make tax payments is dependent on the ability of OpCo to make distributions to us in an amount sufficient to cover our tax obligations and other applicable obligations. This ability, in turn, may depend on the ability of OpCo’s subsidiaries to make distributions to it.
Moreover, because we have no independent means of generating revenue, our ability to make tax payments and fund our other obligations is dependent on the ability of OpCo to make distributions to us in an amount sufficient to cover our tax and other applicable obligations.
Recent and continuing disruptions and volatility in the global financial markets, due to the imposition of tariffs, geopolitical conflicts or otherwise, may lead to an increase in interest rates or a contraction in credit availability impacting our ability to finance operations. We require continued access to capital.
Recent and continuing disruptions and volatility in the global financial markets, due to the imposition, or threat, of tariffs and other trade restrictions, geopolitical conflicts, including in oil producing countries like Venezuela, or otherwise, may lead to an increase in interest rates or a contraction in credit availability impacting our ability to finance operations. We require continued access to capital.
For example, if the crude oil and natural gas prices used in our year-end reserve estimates were to increase or decrease by 10%, our proved reserve quantities at December 31, 2024 would increase by 26.0 MMBoe (2.5%) or decrease by 27.1 MMBoe (2.6%), respectively, and the pre-tax PV 10% of our proved reserves would increase by $2.1 billion (19%) or decrease by $1.4 billion (13%).
For example, if the crude oil and natural gas prices used in our year-end reserve estimates were to increase or decrease by 10%, our proved reserve quantities at December 31, 2025 would increase by 45.5 MMBoe (4.1%) or decrease by 69.5 MMBoe (6.2%) and the pre-tax PV 10% of our proved reserves would increase by $2.2 billion (24%) or decrease by $2.2 billion (23%).
From time to time, federal and state level legislation has been proposed that, if enacted into law, would make significant changes to tax laws, including to certain key U.S. federal and state income tax laws affecting the oil and natural gas industry.
From time to time, U.S. federal and state level legislation has been proposed that, if enacted into law, would make significant changes to tax laws, including to certain key U.S. federal and state income tax provisions currently applicable to natural gas and oil exploration and development companies.
In addition, pollution and environmental risks generally are not fully insurable. The occurrence of an event that is not fully covered by insurance could have a material adverse effect on our business, financial condition and results of operations.
The occurrence of an event that is not fully covered by insurance could have a material adverse effect on our business, financial condition and results of operations.
Additionally, the actions the Trump administration will take with respect to oil and gas leasing on federal lands cannot be predicted at this time, though any such actions may be subject to litigation. In addition to administrative and policy risks, operations on federal lands also face litigation risks.
Additionally, any additional actions the Trump administration will take with respect to oil and gas leasing on federal lands cannot be predicted at this time, though any such actions may be subject to litigation.
Please refer to Regulation of the Oil and Natural Gas Industry in Part I, Items 1 and 2 of this Annual Report for further discussion on protected species regulations and developments.
Please refer to Regulation of the Oil and Natural Gas Industry in Part I, Items 1 and 2 of this Annual Report for further discussion of the regulations affecting our operations on federal lands.
Any breach of our network may result in the loss of valuable business data or critical infrastructure, misappropriation of our customers’ or employees’ personal information, or a disruption of our business, which could harm our customer relationships and reputation, and result in lost revenues, fines or lawsuits.
Any breach of our network may result in the loss of valuable business data or critical infrastructure, misappropriation of our customers’, employees’ or service providers’ personal information, or a disruption of our business and operations, which could harm our customer relationships and reputation, and result in lost revenues, remediation and compliance costs, litigation, regulatory investigations and enforcements and penalties and fines.
As of December 31, 2024, we had approximately $4.2 billion of total long-term debt and additional borrowing capacity of $2.5 billion under OpCo’s revolving credit facility (after giving effect to $2.5 million of outstanding letters of credit), all of which would be secured if borrowed.
As of December 31, 2025, we had approximately $3.5 billion of total long-term debt and additional borrowing capacity of $2.5 billion under OpCo’s revolving credit facility, all of which would be secured if borrowed.
Any one or more of these developments may result in limitations on disposal well volumes, disposal rates and pressures or locations, require us or our vendors to shut down or curtail the injection into disposal wells, or cause delays, interruptions or termination of our operations, which events could have a material adverse effect on our business, financial condition and results of operations.
Any one or more of these developments may result in limitations on disposal well volumes, disposal rates and pressures or locations, require us or our vendors to shut down or curtail the injection into disposal wells, or cause delays, interruptions or termination of our operations, which events could have a material adverse effect on our business, financial condition and results of operations. 27 Table of Contents Our producing properties are concentrated in the Permian Basin, making us vulnerable to risks associated with operating in a single geographic area.
Many U.S. and international banks have also made “net zero” 37 Table of Contents emission commitments or signed-on to initiatives related to reducing GHG emissions. Any reduction in the availability of capital for us or our customers and suppliers could adversely impact our operations and financial performance.
While the landscape is evolving, certain U.S. and international banks, insurers or other financial institutions have also made “net zero” emission commitments or signed-on to initiatives related to reducing GHG emissions. Any reduction in the availability of capital or access to insurance products for us or our customers and suppliers could adversely impact our operations and financial performance.
Our producing properties are concentrated in the Permian Basin, making us vulnerable to risks associated with operating in a single geographic area. Our producing properties are geographically concentrated in West Texas and New Mexico in the Permian Basin. At December 31, 2024, all of our total estimated proved reserves were attributable to properties located in this area.
Our producing properties are geographically concentrated in West Texas and New Mexico in the Permian Basin. At December 31, 2025, all of our total estimated proved reserves were attributable to properties located in this area.
The threat of climate change continues to attract considerable attention in the United States and around the world. Numerous proposals have been made and could continue to be made at the international, national, regional and state levels of government to monitor, limit, and report existing emissions of GHGs as well as to reduce such future emissions.
Numerous proposals have been made and could continue to be made at the international, national, regional and state levels of government to monitor, limit, and report existing emissions of GHGs as well as to reduce such future emissions.
Fuel conservation measures, alternative fuel requirements, any increase in consumer demand for alternatives to oil and natural gas, technological advances in fuel economy and energy generation devices, including as a result of the renewable energy incentives contained in the IRA, could reduce demand for oil and natural gas.
Fuel conservation measures, alternative fuel requirements, any increase in consumer demand for alternatives to oil and natural gas, technological advances in fuel economy and energy generation devices could reduce demand for oil and natural gas.
The loss of senior management or technical personnel could adversely affect operations. We depend on the services of our senior management and technical personnel. We do not maintain, nor do we plan to obtain, any insurance against the loss of any of these individuals.
We do not maintain, nor do we plan to obtain, any insurance against the loss of any of these individuals. The loss of the services of our senior management or technical personnel could have a material adverse effect on our business, financial condition and results of operations.
If OpCo is unable to comply with the restrictions and covenants in the agreements governing its indebtedness, there could be a default under the terms of these agreements, which could result in an acceleration of payment of funds that OpCo has borrowed.
We may also be prevented from taking advantage of business opportunities that arise because of the limitations that the restrictions impose on OpCo. 32 Table of Contents If OpCo is unable to comply with the restrictions and covenants in the agreements governing its indebtedness, there could be a default under the terms of these agreements, which could result in an acceleration of payment of funds that OpCo has borrowed.
In addition, failure or a perception (whether or not valid) of failure to implement ESG strategies or achieve ESG goals or commitments, including any GHG reduction or neutralization goals or commitments, could result in governmental investigations or enforcement, private litigation and damage our reputation, cause our investors or consumers to lose confidence in our Company, and negatively impact our operations.
In addition, failure or a perception (whether or not valid) of failure to pursue, implement or make progress against sustainability strategies or achieve sustainability goals or commitments, including any GHG reduction or neutralization goals or commitments, could result in governmental investigations or enforcement, private litigation and damage our reputation, cause our investors or consumers to lose confidence in our Company, and negatively impact our operations. 36 Table of Contents Any restrictions on oil and natural gas development on federal lands have the potential to adversely impact our operations.
Although, as of the date of this Annual Report, we are not aware of any previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations and financial condition; we acknowledge that cybersecurity threats are continually evolving and the possibility of future cybersecurity incidents, material or otherwise, remains.
As of the date of this Annual Report, though the Company and its service providers have experienced certain cybersecurity incidents, we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations and financial condition.
Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing as well as governmental reviews of such activities could result in increased costs and additional operating restrictions or delays in the completion of oil and natural gas wells and adversely affect our production.
A significant reduction in cash flows from operations or the availability of credit could materially and adversely affect our ability to achieve our planned growth and operating results. 33 Table of Contents Risks Related to Legislative and Regulatory Initiatives Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing as well as governmental reviews of such activities could result in increased costs and additional operating restrictions or delays in the completion of oil and natural gas wells and adversely affect our production.
Our operations are subject to stringent, complex and evolving federal, state and local laws and regulations governing the discharge of materials into the environment, health and safety aspects of our operations or otherwise relating to protection of the environment and natural resources (including threatened and endangered species and their habitats).
Our operations may be exposed to significant delays, costs and liabilities as a result of environmental and occupational health and safety requirements applicable to our business activities. 34 Table of Contents Our operations are subject to stringent, complex and evolving federal, state and local laws and regulations governing the discharge of materials into the environment, health and safety aspects of our operations or otherwise relating to protection of the environment and natural resources (including threatened and endangered species and their habitats).
The restrictions in OpCo’s debt agreements may also limit our ability to obtain future financings to withstand a future downturn in our business or the economy in general, or to otherwise conduct necessary corporate activities. We may also be prevented from taking advantage of business opportunities that arise because of the limitations that the restrictions imposed on OpCo.
The restrictions in OpCo’s debt agreements may also limit our ability to obtain future financings to withstand a future downturn in our business or the economy in general, or to otherwise conduct necessary corporate activities.
The loss of the services of our senior management or technical personnel could have a material adverse effect on our business, financial condition and results of operations. Risks Related to Our Derivative Transactions, Debt and Access to Capital Our derivative activities could result in financial losses or could reduce our earnings.
Our inability to compete effectively with our competitors could have a material and adverse impact on our business activities, financial condition and results of operations. 30 Table of Contents Risks Related to Our Derivative Transactions, Debt and Access to Capital Our derivative activities could result in financial losses or could reduce our earnings.
Any elimination of, or downward revision in, our stock repurchase program or dividend policy could have an adverse effect on the market price of our common stock. 42 Table of Contents Provisions contained in our Charter and Bylaws, as well as provisions of Delaware law, could impair a takeover attempt, which may adversely affect the market price of our common stock.
Provisions contained in our Charter and Bylaws, as well as provisions of Delaware law, could impair a takeover attempt, which may adversely affect the market price of our common stock.
Similarly, any dividends, whether fixed or variable, we may declare in the future will be determined by our board of directors in its sole discretion.
Similarly, any dividends, whether fixed or variable, we may declare in the future will be determined by our board of directors in its sole discretion. Any elimination of, or downward revision in, our stock repurchase program or dividend policy could have an adverse effect on the market price of our common stock.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risk management processes are integrated into our broader risk management program. As part of our cybersecurity risk management process, we conduct simulated cybersecurity incidents to ensure that we are prepared to respond to such incidents and to highlight any areas for potential improvement in our cyber incident preparedness.
Biggest changeAs part of our cybersecurity risk management process, we conduct simulated cybersecurity incidents to ensure that we are prepared to respond to such incidents and to highlight any areas for potential improvement in our cyber incident preparedness. The Cybersecurity Program is maintained in alignment with the National Institute of Standards and Technology (NIST) Cybersecurity Framework for risk management.
ITEM 1C. CYBERSECURITY Risk Management and Strategy We rely on information technology and data to operate our business effectively and recognize the importance of implementing and maintaining cybersecurity systems and processes that allow us to protect the confidentiality, integrity and availability of our information systems and the data residing within them.
ITEM 1C. CYBERSECURITY Risk Management and Strategy We rely on information and operational technology and data to operate our business effectively and recognize the importance of implementing and maintaining cybersecurity systems and processes that allow us to protect the confidentiality, integrity and availability of our information and operational systems and the data residing within them.
We acknowledge that cybersecurity threats are continually evolving, and the possibility of future cybersecurity incidents, material or otherwise, remains. Despite the implementation of our cybersecurity processes, our security measures cannot guarantee that a significant cybersecurity incident will not occur. While we devote resources to our security measures designed to protect our systems and information, no security measure is infallible.
We acknowledge that cybersecurity threats are continually evolving, and the possibility of future cybersecurity incidents, material or otherwise, remains. Despite the implementation of our Cybersecurity Program, our security measures cannot guarantee that a significant cybersecurity incident will not occur. While we devote resources to our security measures designed to protect our systems and information, no security measure is infallible.
For more information about the cybersecurity risks we face, refer to Risk Factors under Part I, Item 1A of this Annual Report.
For more information about the cybersecurity risks we face, refer to Risk Factors under Part I, Item 1A of this Annual Report. 40 Table of Contents
Impact of Risks from Cybersecurity Threats As of the date of this report, we are not aware of any previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations and financial condition.
Impact of Risks from Cybersecurity Threats As of the date of this report, though the Company and its service providers have experienced certain cybersecurity incidents, we are not aware of any previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations and financial condition.
In order to monitor our information technology systems and data and to identify, assess and manage potential threats to such, we maintain cybersecurity risk assessment and management programs.
In order to monitor our information and operational technology systems and data and to identify, assess and manage potential threats to such, we maintain a cybersecurity risk assessment and management program (the “Cybersecurity Program”).
If an incident is deemed to be a breach, it is communicated to our legal department and management for evaluation, including whether the breach requires communication to the Audit Committee or the Board of Directors or investors through a relevant public filing.
If an incident is determined to constitute a breach, it is elevated to our legal department and management for further review, including whether the matter requires notification to the Audit Committee or the Board of Directors or disclosure to investors through a public filing.
Governance Our cybersecurity risk management is primarily the responsibility of our Vice President and Chief Information Officer and the information technology teams he leads. Our Vice President and Chief Information Officer has 25 years of industry experience in the field of information systems, including information security and risk management.
Governance Our cybersecurity risk assessment and management is primarily the responsibility of our CIO, who is supported by the information technology teams he leads including the cybersecurity team and certain assessor, consultants, auditors or other third parties, as necessary. Our CIO has over 25 years of industry experience in the field of information systems, including information security and risk management.
He oversees our risk assessment programs, remediation of known risks, processes for the regular monitoring of our information systems and our employee cybersecurity training programs.
He oversees our risk assessment programs, remediation of known risks, processes for the regular monitoring of our information systems and our employee cybersecurity training programs. Our Board of Directors also oversees cybersecurity risks through our Audit Committee, which receives and assesses periodic reports and updates regarding our Cybersecurity Program from management and our CIO.
We have a cybersecurity incident management policy and response plan in place. Cybersecurity breaches are evaluated by our information technology teams, which includes our Vice President and Chief Information Officer.
Cybersecurity incidents are evaluated by the cybersecurity team, which reports to our Vice President and Chief Information Officer (“CIO”).
Removed
As part of such programs, we endeavor to conduct annual security penetration tests both externally and internally, bi-annual security assessments against cybersecurity frameworks, continuous vulnerability scanning and monthly and annual security awareness and simulated phishing trainings for our employees. We have also implemented incident response processes and various system alert monitoring and screenings.
Added
We employ a variety of tools designed to identify, assess and manage cybersecurity threats, including monitoring and detection programs, network security measures, firewall monitoring devices and encryption of certain data. The Cybersecurity Program includes a cybersecurity incident response plan that provides the framework for categorizing and responding to cybersecurity incidents.
Removed
Our Board of Directors also oversees cybersecurity risks through the Audit Committee, which receives and assesses periodic reports and updates regarding our cybersecurity risk management from management and our Vice President and Chief Information Officer and then relays them to the Board of Directors as needed.
Added
The Company aims to conduct bi‑annual NIST cybersecurity risk assessments and annual independent penetration tests to identify potential areas for enhancement and to evaluate the Cybersecurity Program’s maturity relative to peer organizations, industry benchmarks, and other applicable standards. Our cybersecurity risk management processes are integrated into our broader risk management program.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe believe proceedings under this threshold are not material to our business and financial condition. 44 Table of Contents In connection with the Earthstone Merger, we assumed a liability related to potential environmental defects that were identified through diligence reviews associated with Earthstone’s previous acquisition of Novo Oil & Gas Legacy Holdings, LLC, Novo Intermediate, LLC and Novo Oil & Gas Holdings, LLC (collectively “Novo”).
Biggest changeIn connection with the Earthstone Merger, we assumed a liability related to potential environmental defects that were identified through diligence reviews associated with Earthstone’s previous acquisition of Novo Oil & Gas Legacy Holdings, LLC, Novo Intermediate, LLC and Novo Oil & Gas Holdings, LLC (collectively “Novo”).
We are not aware of any other material environmental claims existing as of December 31, 2024 over our threshold which have not been provided for or would otherwise have a material impact on our financial statements; however, there can be no assurance that current regulatory requirements will not change or that unknown potential past non-compliance with environmental laws or other environmental liabilities will not be discovered on our properties.
We are not aware of any other material environmental claims existing as of December 31, 2025 over our threshold which have not been provided for or would otherwise have a material impact on our financial statements; however, there can be no assurance that current regulatory requirements will not change or that unknown potential past non-compliance with environmental laws or other environmental liabilities will not be discovered on our properties.
ITEM 3. LEGAL PROCEEDINGS Refer to Note 14—Commitments and Contingencies under Part II, Item 8 of this Annual Report for more information regarding our legal proceedings. Environmental . Due to the nature of the oil and gas industry, we are exposed to environmental risks.
ITEM 3. LEGAL PROCEEDINGS Refer to Note 13—Commitments and Contingencies under Part II, Item 8 of this Annual Report for more information regarding our legal proceedings. Environmental . Due to the nature of the oil and gas industry, we are exposed to environmental risks.
ITEM 4. MINE SAFETY DISCLOSURE Not applicable. 45 Table of Contents PART II
ITEM 4. MINE SAFETY DISCLOSURE Not applicable. 41 Table of Contents PART II
Pursuant to such item, we have elected to use a $1 million threshold for purposes of determining whether disclosure of any such proceedings is required.
Pursuant to such item, we have elected to use a $1 million threshold for purposes of determining whether disclosure of any such proceedings is required. We believe proceedings under this threshold are not material to our business and financial condition.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table provides the components of our net revenues and net production (net of all royalties, overriding royalties and production due to others) for the periods indicated, as well as each period’s average prices and average daily production volumes: Year Ended December 31, Increase/(Decrease) 2024 2023 $ % Net revenues (in thousands): Oil sales $ 4,362,965 $ 2,696,777 $ 1,666,188 62 % Natural gas sales (1) 240 142,077 (141,837) (100) % NGL sales (2) 637,529 282,039 355,490 126 % Oil and gas sales $ 5,000,734 $ 3,120,893 $ 1,879,841 60 % Average sales prices: Oil (per Bbl) $ 74.87 $ 75.84 $ (0.97) (1) % Effect of derivative settlements on average price (per Bbl) 0.03 1.81 (1.78) (99) % Oil including the effects of hedging (per Bbl) $ 74.90 $ 77.65 $ (2.75) (4) % Average NYMEX WTI price for oil (per Bbl) $ 75.72 $ 77.62 $ (1.90) (2) % Oil differential from NYMEX (0.85) (1.78) 0.93 52 % Natural gas price excluding the effects of GP&T (per Mcf) (1) $ 0.47 $ 1.60 $ (1.13) (71) % Effect of derivative settlements on average price (per Mcf) 0.34 0.29 0.05 17 % Natural gas including the effects of hedging (per Mcf) $ 0.81 $ 1.89 $ (1.08) (57) % Average NYMEX Henry Hub price for natural gas (per MMBtu) $ 2.24 $ 2.53 $ (0.29) (11) % Natural gas differential from NYMEX (1.77) (0.93) (0.84) (90) % NGL price excluding the effects of GP&T (per Bbl) (2) $ 23.75 $ 22.83 $ 0.92 4 % Net production: Oil (MBbls) 58,276 35,560 22,716 64 % Natural gas (MMcf) 220,900 119,182 101,718 85 % NGL (MBbls) 30,636 15,569 15,067 97 % Total (MBoe) (3) 125,730 70,992 54,738 77 % Average daily net production: Oil (Bbls/d) 159,225 97,424 61,801 63 % Natural gas (Mcf/d) 603,551 326,525 277,026 85 % NGL (Bbls/d) 83,706 42,654 41,052 96 % Total (Boe/d) (3) 343,523 194,499 149,024 77 % (1) Natural gas sales for the year ended December 31, 2024 include $104.1 million of GP&T costs that are reflected as a reduction to natural gas sales and $48.9 million for the year ended December 31, 2023.
Biggest changeRefer to Note 16—Subsequent Events under Part II, Item 8 of this Annual Report for additional information on the Reorganization that occurred after the reporting period. 44 Table of Contents Results of Operations For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 The following table provides the components of our net revenues and net production (net of all royalties, overriding royalties and production due to others) for the periods indicated, as well as each period’s average prices and average daily production volumes: Year Ended December 31, Increase/(Decrease) 2025 2024 $ % Net revenues (in thousands): Oil sales $ 4,251,193 $ 4,362,965 $ (111,772) (3) % NGL sales 658,515 637,529 20,986 3 % Natural gas sales 131,663 240 131,423 54,760 % Purchased gas sales, net 23,840 — 23,840 100 % Oil and gas sales $ 5,065,211 $ 5,000,734 $ 64,477 1 % Net production: Oil (MBbls) 66,364 58,276 8,088 14 % NGL (MBbls) 35,773 30,636 5,137 17 % Natural gas (MMcf) 247,045 220,900 26,145 12 % Total (MBoe) (3) 143,311 125,730 17,581 14 % Average daily net production: Oil (Bbls/d) 181,819 159,225 22,594 14 % NGL (Bbls/d) 98,008 83,706 14,302 17 % Natural gas (Mcf/d) 676,835 603,551 73,284 12 % Total (Boe/d) (3) 392,633 343,523 49,110 14 % Average sales prices: Oil (per Bbl) $ 64.06 $ 74.87 $ (10.81) (14) % Effect of derivative settlements on average price (per Bbl) 2.40 0.03 2.37 7,900 % Oil including the effects of hedging (per Bbl) $ 66.46 $ 74.90 $ (8.44) (11) % NGL (per Bbl) $ 18.41 $ 20.81 $ (2.40) (12) % Natural gas (per Mcf) $ 0.53 $ — $ 0.53 100 % Effect of derivative settlements on average price (per Mcf) 0.48 0.34 0.14 41 % Effect of purchased gas sales on average price (per Mcf) 0.10 — 0.10 100 % Natural gas including the effects of hedging (per Mcf) $ 1.11 $ 0.34 $ 0.77 226 % (1) Calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Boe.
The performance graph below compares the cumulative total stockholder return on our Class A Common Stock (“PR”) to that of the Standard & Poor’s 500 Index (“S&P 500”) and the Standard & Poor’s 500 Oil and Gas Exploration & Production ETF (“XOP”).
Stock Performance Graph The performance graph below compares the cumulative total stockholder return on our Class A Common Stock (“PR”) to that of the Standard & Poor’s 500 Index (“S&P 500”) and the Standard & Poor’s 500 Oil and Gas Exploration & Production ETF (“XOP”).
Factors that could cause or contribute to such differences include, but are not limited to, future market prices for oil, natural gas and NGLs, future production volumes, estimates of proved reserves, capital expenditures, economic and competitive conditions, inflation, regulatory changes, and other uncertainties, as well as those factors discussed in “Cautionary Statement Concerning Forward-Looking Statements” and “Item 1A.
Factors that could cause or contribute to such differences include, but are not limited to, future market prices for oil, NGLs and natural gas, future production volumes, estimates of proved reserves, capital expenditures, economic and competitive conditions, inflation, regulatory changes, and other uncertainties, as well as those factors discussed in “Cautionary Statement Concerning Forward-Looking Statements” and “Item 1A.
Market Conditions Our revenue, profitability and ability to return cash to stockholders can depend substantially on factors beyond our control, such as economic, political and regulatory developments. Prices for crude oil, natural gas and NGLs have experienced significant fluctuations in recent years and may continue to fluctuate widely in the future.
Market Conditions Our revenue, profitability and ability to return cash to stockholders can depend substantially on factors beyond our control, such as economic, political and regulatory developments. Prices for crude oil, NGLs and natural gas have experienced significant fluctuations in recent years and may continue to fluctuate widely in the future.
Accordingly, we can choose to defer or accelerate a portion of our planned capital expenditures depending on a variety of factors, including but not limited to: (i) prevailing and anticipated prices for oil and natural gas; (ii) oil storage or transportation constraints; (iii) the success of our drilling activities; (iv) the availability of necessary equipment, infrastructure and capital; (v) the receipt and timing of required regulatory permits and approvals; (vi) seasonal conditions; (vii) property or land acquisition costs; and (viii) the level of participation by other working interest owners.
Accordingly, we can choose to defer or accelerate a portion of our planned capital expenditures depending on a variety of factors, including but not limited to: (i) prevailing and anticipated prices for oil and natural gas; (ii) oil and gas storage or transportation constraints; (iii) the success of our drilling activities; (iv) the availability of necessary equipment, infrastructure and capital; (v) the receipt and timing of required regulatory permits and approvals; (vi) seasonal conditions; (vii) property or land acquisition costs; and (viii) the level of participation by other working interest owners.
The Credit Agreement includes fall away covenants, lower interest rates and reduced collateral requirements that OpCo may elect if OpCo is assigned an Investment Grade Rating (as defined within the Credit Agreement). OpCo was in compliance with the covenants and financial ratios under the Amended Credit Agreement described above through the filing of this Annual Report.
The Credit Agreement includes fall away covenants, lower interest rates and reduced collateral requirements that OpCo may elect if OpCo is assigned an Investment Grade Rating (as defined within the Credit Agreement). OpCo was in compliance with the covenants and financial ratios under the Credit Agreement described above through the filing of this Annual Report.
Lower realized prices may also reduce the borrowing base under our Credit Agreement, which is determined at the discretion of the lenders and is based on the collateral value of our proved reserves that have been mortgaged to the lenders.
Lower realized prices may also reduce the borrowing base under our Credit Agreement, which is determined at the discretion of the lenders and is based on the collateral value of our proved reserves that have been mortgaged to such lenders.
Please refer to Note 16—Leases under Part II, Item 8 of this Annual Report for details on our operating lease commitments. (2) Finance leases consist of our ground lease related to the office building we purchased in Midland, Texas. The lease term is ninety-nine years and as a result, the commitments above have been shown at their current present value.
Please refer to Note 15—Leases under Part II, Item 8 of this Annual Report for details on our operating lease commitments. (2) Finance leases consist of our ground lease related to the office building we purchased in Midland, Texas. The lease term is ninety-nine years and as a result, the commitments above have been shown at their current present value.
The oil and natural gas industry is cyclical, and it is likely that commodity prices, as well as commodity price differentials, will continue to be volatile due to fluctuations in global supply and demand, inventory levels, geopolitical events, federal and state government regulations, weather conditions, the global transition to alternative energy sources, supply chain constraints and other factors.
The oil and natural gas industry is cyclical, and it is likely that commodity prices, as well as commodity price differentials, will continue to be volatile due to fluctuations in global supply and demand, inventory levels, geopolitical events, federal and state government regulations weather conditions, growth in alternative energy sources, supply chain constraints and other factors.
(7) Cash interest expense on our senior notes is estimated assuming no principal repayment until the maturity of the instruments. Cash interest expense on the Credit Agreement includes unused commitment fees and assumes no additional principal borrowings, repayments or changes to commitments under the agreement through the instrument due date.
(8) Cash interest expense on our senior notes is estimated assuming no principal repayment until the maturity of the instruments. Cash interest expense on the Credit Agreement includes unused commitment fees and assumes no additional principal borrowings, repayments or changes to commitments under the agreement through the instrument due date.
Upon a redetermination, if any borrowings in excess of the revised borrowing capacity were outstanding, we could be forced to immediately repay a portion of the debt outstanding under the Credit Agreement. Due to the cyclical nature of the oil and gas industry, fluctuating demand for oilfield goods and services can put pressure on the pricing structure within our industry.
Upon a redetermination, if any borrowings in excess of the revised borrowing capacity were outstanding, we could be forced to immediately repay a portion of the debt outstanding under the Credit Agreement. 43 Table of Contents Due to the cyclical nature of the oil and gas industry, fluctuating demand for oilfield goods and services can put pressure on the pricing structure within our industry.
We funded our capital expenditures for 2024 entirely from cash flows from operations, and we expect to fund our 2025 capital expenditures budget entirely from cash flows from operations given our anticipated level of oil and gas production, current commodity prices and our commodity hedge positions in place.
We funded our capital expenditures for 2025 entirely from cash flows from operations, and we expect to fund our 2026 capital expenditures budget entirely from cash flows from operations given our anticipated level of oil and gas production, current commodity prices and our commodity hedge positions in place.
(4) Consists of obligations that are tied to our future drilling, completion and water connection activity in Reeves County, Texas that will require repayment if certain performance obligations through September 2026 are not met.
(5) Consists of obligations that are tied to our future drilling, completion and water connection activity in Reeves County, Texas that will require repayment if certain performance obligations through September 2026 are not met.
The following table summarizes our obligations and commitments as of December 31, 2024 to make future payments under long-term contracts for the time periods specified below.
The following table summarizes our obligations and commitments as of December 31, 2025, to make future payments under long-term contracts for the time periods specified below.
(5) Asset retirement obligations reflect the present value of the estimated future costs associated with the plugging and abandonment of oil and gas wells and the related land restoration in accordance with applicable laws and regulations. (6) Long-term debt consists of the principal amounts of our senior notes due as of December 31, 2024.
(6) Asset retirement obligations reflect the present value of the estimated future costs associated with the plugging and abandonment of oil and gas wells and the related land restoration in accordance with applicable laws and regulations. (7) Long-term debt consists of the principal amounts of our senior notes due as of December 31, 2025.
For further information on our Convertible Senior Notes and Senior Unsecured Notes, refer to Note 5—Long-Term Debt under Item 8 of this Annual Report. 58 Table of Contents Obligations and Commitments We routinely enter into or extend operating and transportation agreements, office and equipment leases, drilling rig contracts, among others, in the ordinary course of business.
For further information on our Senior Unsecured Notes, refer to Note 5—Long-Term Debt under Part II, Item 8 of this Annual Report. 50 Table of Contents Obligations and Commitments We routinely enter into or extend operating and transportation agreements, office and equipment leases, drilling rig contracts, among others, in the ordinary course of business.
For the year ended December 31, 2024, cash flows from operating activities, proceeds from the issuance of our 2033 Senior Notes and proceeds from an underwritten public offering of 26.5 million Class A shares were used to: (i) fund $2.1 billion of drilling and development cash expenditures; (ii) fund acquisitions of oil and gas properties of approximately $1.0 billion; (iii) redeem $656.4 million of our senior notes; (iv) pay $560.9 million in dividends and cash distributions to holders of our Common Units; and (v) repurchase $61.0 million of our common stock.
For the year ended December 31, 2024, cash flows from operating activities, proceeds from the issuance of our 6.25% Senior Notes due 2033 and proceeds from an underwritten public offering of 26.5 million Class A Common Stock were used to: (i) fund $2.1 billion of drilling and development cash capital expenditures; (ii) fund acquisitions of oil and gas properties of approximately $1.0 billion; (iii) redeem $656.4 million of our senior notes; (iv) pay $560.9 million in dividends and cash distributions to our shareholders and holders of our Common Units; and (v) repurchase $61.0 million of our Class C Common Stock.
Changes in our assessment or these factors could result in additional impairment charges of our undeveloped leases. 60 Table of Contents
Changes in our assessment or these factors could result in additional impairment charges of our undeveloped leases. 52 Table of Contents
To date, our primary uses of capital have been for drilling and development capital expenditures and the acquisition of oil and natural gas properties. We continually evaluate our capital needs and compare them to our capital resources. Our total capital expenditures incurred for development during the year ended December 31, 2024 were $2.1 billion.
To date, our primary uses of capital have been for drilling and development capital expenditures and the acquisition of oil and natural gas properties. We continually evaluate our capital needs and compare them to our capital resources. Our total capital expenditures incurred for drilling and development activity during the year ended December 31, 2025 were $1.97 billion.
The “cumulative total return” assumes that $100 was invested, including reinvestment of dividends, if any, in our Class A Common Stock, the S&P 500, and XOP on December 31, 2019, and tracks it through December 31, 2024. The results shown in the graph below are not necessarily indicative of future stock price performance.
The “cumulative total return” assumes $100, including reinvestment of any dividends, was invested in our Class A Common Stock, the S&P 500, and XOP on December 31, 2020, and tracks it through December 31, 2025. The results shown in the graph below are not necessarily indicative of future stock price performance.
DD&A per Boe was $14.13 for the year ended December 31, 2024 compared to $14.19 for the same period in 2023. Our DD&A rate can fluctuate as a result of finding and development costs incurred, acquisitions, impairments, as well as changes in proved developed and proved undeveloped reserves. General and Administrative Expenses.
DD&A per Boe was $14.18 for the year ended December 31, 2025 compared to $14.13 for the same period in 2024. Our DD&A rate can fluctuate as a result of finding and development costs incurred, acquisitions, impairments, as well as changes in proved developed and proved undeveloped reserves. 46 Table of Contents General and Administrative Expenses.
Our principal business objective is to increase shareholder value by efficiently developing our oil and natural gas assets in an environmentally and socially responsible way, with an overall objective of improving our rates of return and generating sustainable free cash flow.
Our principal business objective is to increase shareholder value by efficiently developing our oil and natural gas assets, with an overall objective of improving our rates of return and generating sustainable free cash flow.
During the year ended December 31, 2024, we declared and paid quarterly base dividends totaling $0.32 per share of Class A Common Stock and distributions totaling $0.32 per share of Class C Common Stock (each of which has an underlying common unit of OpCo (“Common Units”)).
During the year ended December 31, 2025, we declared and paid quarterly base dividends totaling $0.60 per share of Class A Common Stock and distributions totaling $0.60 per share of Class C Common Stock (each of which has an underlying Common Unit of OpCo).
This increase in expense was mainly attributable to higher natural gas 52 Table of Contents and NGL volumes sold between periods, which in turn resulted in a higher amount of plant processing fees and gathering costs being incurred.
This increase in expense was mainly attributable to higher NGL and natural gas volumes sold between periods, which in turn resulted in a higher amount of plant processing fees and gathering costs being incurred. Depreciation, Depletion and Amortization.
The following table highlights the quarterly average price trends for NYMEX WTI spot prices for crude oil and NYMEX Henry Hub index price for natural gas since the first quarter of 2022: 2022 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Crude Oil (per Bbl) $ 94.40 $ 108.34 $ 91.56 $ 82.64 $ 76.13 $ 73.78 $ 82.26 $ 78.32 $ 76.96 $ 80.55 $ 75.16 $ 70.28 Natural Gas (per MMBtu) $ 4.60 $ 7.39 $ 7.96 $ 5.55 $ 2.67 $ 2.12 $ 2.58 $ 2.74 $ 2.41 $ 2.04 $ 2.08 $ 2.42 Lower commodity prices and lower futures curves for oil and gas prices can result in impairments of our proved oil and natural gas properties or undeveloped acreage and may materially and adversely affect our operating cash flows, liquidity, financial condition, results of operations, future business and operations, and/or our ability to finance planned capital 48 Table of Contents expenditures, which could in turn impact our ability to comply with covenants under our Credit Agreement and senior notes.
The following table highlights the quarterly average price trends for NYMEX WTI spot prices for crude oil and NYMEX Henry Hub index price for natural gas since the first quarter of 2023: 2023 2024 2025 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Crude Oil (per Bbl) $ 76.13 $ 73.78 $ 82.26 $ 78.32 $ 76.96 $ 80.55 $ 75.16 $ 70.28 $ 71.42 $ 63.71 $ 64.95 $ 59.13 Natural Gas (per MMBtu) $ 2.67 $ 2.12 $ 2.58 $ 2.74 $ 2.41 $ 2.04 $ 2.08 $ 2.42 $ 4.27 $ 3.16 $ 3.07 $ 3.69 Lower commodity prices and lower futures curves for oil and gas prices can result in impairments of our proved oil and natural gas properties or undeveloped acreage and may materially and adversely affect our operating cash flows, liquidity, financial condition, results of operations, future business and operations, and/or our ability to finance planned capital expenditures, which could in turn impact our ability to comply with covenants under our Credit Agreement and senior notes.
The primary factor decreasing our income tax expense below the U.S. statutory rate for both periods was the portion of pre-tax income that was attributable to our non-controlling interest partners and not taxable to the Company. For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Refer to Item 7.
The primary factor decreasing our 2024 tax expense below the statutory U.S. federal income tax rate was the portion of pre-tax income that was attributable to our noncontrolling interest partners and not taxable to the Company. For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Refer to Item 7.
ITEM 6. [Reserved] 47 Table of Contents ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements and related notes in “Item 8. Financial Statements and Supplementary Data” in this Annual Report.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements and related notes in “Item 8. Financial Statements and Supplementary Data” in this Annual Report.
Credit Agreement OpCo, our consolidated subsidiary, has a secured revolving Credit Agreement with a syndicate of banks maturing in February 2028 that, as of December 31, 2024, had a borrowing base of $4.0 billion and elected commitments of $2.5 billion.
Credit Agreement OpCo, our consolidated subsidiary, has a secured revolving Credit Agreement with a syndicate of banks maturing in February 2028 that, as of December 31, 2025, had a borrowing base of $4.0 billion and elected commitments of $2.5 billion. As of December 31, 2025, we had no borrowings outstanding and $2.5 billion in available borrowing capacity.
The following table summarizes our depreciation, depletion and amortization (“DD&A”) for the periods indicated: Year Ended December 31, (in thousands, except per Boe data) 2024 2023 Depreciation, depletion and amortization $ 1,776,673 $ 1,007,576 Depreciation, depletion and amortization per Boe $ 14.13 $ 14.19 For the year ended December 31, 2024, DD&A expense amounted to $1.8 billion, an increase of $769.1 million from 2023.
The following table summarizes our depreciation, depletion and amortization (“DD&A”) for the periods indicated: Year Ended December 31, (in thousands, except per Boe data) 2025 2024 Depreciation, depletion and amortization $ 2,032,507 $ 1,776,673 Depreciation, depletion and amortization per Boe $ 14.18 $ 14.13 For the year ended December 31, 2025, DD&A expense amounted to $2.0 billion, an increase of $255.8 million from 2024.
Natural gas and NGLs are produced concurrently with our crude oil volumes, typically resulting in a high correlation between fluctuations in oil quantities sold and natural gas and NGL quantities sold driving the 85% and 97% increases in gas and NGL volumes, respectively, between periods.
NGLs and natural gas are produced concurrently with our crude oil volumes, which typically result in a high correlation between fluctuations in oil quantities sold and NGL and natural gas quantities sold, driving the respective 17% and 12% increases in NGL and gas volumes, respectively, between periods.
Financing On January 24, 2025, we redeemed $175 million of OpCo’s outstanding senior notes due 2031 (the “2031 Senior Notes”) at a redemption price equal to 109.875% of the principal amount redeemed plus accrued and unpaid interest up to, but excluding, the redemption date.
During January 2025, we redeemed $175 million of our senior notes due 2031 (the “2031 Senior Notes”) at a redemption price equal to 109.875% of the aggregate principal amount redeemed plus accrued and unpaid interest up to, but excluding, the redemption date. Following the redemption, the remaining aggregate principal amount of the 2031 Senior Notes outstanding was $325 million.
Analysis of Cash Flow Changes The following table summarizes our cash flows for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 2022 Net cash provided by operating activities $ 3,411,968 $ 2,213,499 $ 1,371,671 Net cash used in investing activities (3,104,195) (1,578,379) (1,205,049) Net cash (used in) provided by financing activities 97,706 (631,188) (106,625) Cash Flows from 2024 Compared to 2023.
Analysis of Cash Flow Changes The following table summarizes our cash flows for the periods indicated: Year Ended December 31, (in thousands) 2025 2024 2023 Net cash provided by operating activities $ 3,607,541 $ 3,411,968 $ 2,213,499 Net cash used in investing activities (2,873,454) (3,104,195) (1,578,379) Net cash (used in) provided by financing activities (1,059,740) 97,706 (631,188) 49 Table of Contents Cash Flows from 2025 Compared to 2024.
We expect our total drilling, completion and facilities capital expenditures budget for 2025 to be between $1.9 billion to $2.1 billion.
We expect our total drilling, completion and facilities capital expenditures budget for 2026 to be between $1.75 billion to $1.95 billion.
Severance and ad valorem taxes for the year ended December 31, 2024 increased $137.0 million compared to the year ended December 31, 2023.
Severance and ad valorem taxes for the year ended December 31, 2025 increased $12.5 million compared to the year ended December 31, 2024.
Such repurchases would be made at terms and prices determined by us based upon prevailing market conditions, applicable legal requirements, available liquidity, compliance with our debt agreements and other factors.
Our Repurchase Program can be used to reduce our shares of common stock outstanding. Such repurchases would be made at terms and prices determined by us based upon prevailing market conditions, applicable legal requirements, available liquidity, compliance with our debt agreements and other factors.
For the year ended December 31, 2024, we generated $3.4 billion of cash from operating activities, an increase of $1.2 billion from 2023. Cash provided by operating activities increased primarily due to higher production volumes and lower merger and integration expense for the year ended December 31, 2024 as compared to the same 2023 period.
Cash provided by operating activities increased primarily due to higher production volumes and lower merger and integration expense for the year ended December 31, 2024 as compared to the same 2023 period.
Cash Flows from 2023 Compared to 2022. For the year ended December 31, 2023, we generated $2.2 billion of cash from operating activities, an increase of $841.8 million from 2022.
Cash Flows from 2024 Compared to 2023. For the year ended December 31, 2024, we generated $3.4 billion of cash from operating activities, an increase of $1.2 billion from 2023.
The following table summarizes our general and administrative (“G&A”) expenses for the periods indicated: Year Ended December 31, (in thousands, except per Boe data) 2024 2023 Cash general and administrative expenses $ 116,387 $ 85,978 Stock-based compensation expense 58,243 75,877 General and administrative expenses $ 174,630 $ 161,855 Cash general and administrative expenses per Boe $ 0.93 $ 1.21 G&A expenses for the year ended December 31, 2024 were $174.6 million compared to $161.9 million for the year ended December 31, 2023.
The following table summarizes our general and administrative (“G&A”) expenses for the periods indicated: Year Ended December 31, (in thousands, except per Boe data) 2025 2024 Cash general and administrative expenses $ 119,513 $ 116,387 Stock-based compensation expense 66,958 58,243 General and administrative expenses $ 186,471 $ 174,630 Cash general and administrative expenses per Boe $ 0.83 $ 0.93 G&A expenses for the year ended December 31, 2025 were $186.5 million compared to $174.6 million for the year ended December 31, 2024.
Overview We are an independent oil and natural gas company focused on the responsible acquisition, optimization and development of high-return oil and natural gas properties. Our assets are mainly located in the core of the Permian Basin.
Overview We are an independent oil and natural gas company focused on driving returns to our stockholders through the acquisition, optimization and development of high-return oil and natural gas properties. Our assets and operations are located in the Permian Basin, with a concentration in the core of the Delaware Basin.
The New Repurchase Program is approved to run on an indefinite basis and can be used by the Company to reduce its shares of Class A Common Stock and Class C Common Stock outstanding.
Stock Repurchase Program Our Board of Directors has authorized a share repurchase program of $1 billion of the Company’s outstanding Common Stock (“Repurchase Program”), which is approved to run on an indefinite basis and can be used by the Company to reduce its shares of Class A and Class C Common Stock outstanding.
The successful efforts method inherently relies on the estimation of proved crude oil, natural gas and NGL reserves.
Oil and Natural Gas Reserve Quantities We use the successful efforts method of accounting for our oil and gas producing activities. The successful efforts method inherently relies on the estimation of proved crude oil, NGL and natural gas reserves.
A summary of our significant accounting policies can be found in Note 1—Basis of Presentation and Summary of Significant Accounting Policies under Item 8 of this Annual Report.
A summary of our significant accounting policies can be found in Note 1—Basis of Presentation and Summary of Significant Accounting Policies under Item 8 of this Annual Report. We have outlined certain of our accounting policies below which require the application of significant judgment by our management.
The following table sets forth selected operating expense data for the periods indicated: Year Ended December 31, Increase/(Decrease) 2024 2023 Change % Operating costs (in thousands): Lease operating expenses $ 685,172 $ 373,772 $ 311,400 83 % Severance and ad valorem taxes 377,731 240,762 136,969 57 % Gathering, processing, and transportation expense 183,602 89,282 94,320 106 % Operating cost metrics: Lease operating expenses (per Boe) $ 5.45 $ 5.26 $ 0.19 4 % Severance and ad valorem taxes (% of revenue) 7.6 % 7.7 % (0.1) % (1) % Gathering, processing, and transportation expense (per Boe) 1.46 1.26 0.20 16 % Lease Operating Expenses.
The following table sets forth selected operating expense data for the periods indicated: Year Ended December 31, Increase/(Decrease) 2025 2024 Change % Operating costs (in thousands): Lease operating expenses $ 753,119 $ 685,172 $ 67,947 10 % Severance and ad valorem taxes 390,255 377,731 12,524 3 % Gathering, processing, and transportation expense 200,103 183,602 16,501 9 % Operating cost metrics: Lease operating expenses (per Boe) $ 5.26 $ 5.45 $ (0.19) (3) % Severance and ad valorem taxes (% of revenue) 7.7 % 7.6 % 0.1 % 1 % Gathering, processing, and transportation expense (per Boe) 1.40 1.46 (0.06) (4) % Lease Operating Expenses.
The primary factor contributing to higher DD&A expense in 2024 was the increase in our overall production volumes between periods, which increased DD&A expense by $776.9 million period over period, while our lower DD&A rate of $14.13 per Boe decreased DD&A expense by $7.8 million between periods.
The primary factor contributing to higher DD&A expense in 2025 was the increase in our overall production volumes between periods, which increased DD&A expense by $248.4 million period over period, while marginally higher DD&A rates between periods increased DD&A expense by $7.4 million.
Critical Accounting Policies and Estimates The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
Financial Statements and Supplementary Data in this annual report for a discussion of recently issued accounting standards and their anticipated effect on our business. 51 Table of Contents Critical Accounting Policies and Estimates The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
On April 5, 2024, we redeemed all of OpCo’s outstanding 6.875% senior notes due 2027 at a redemption price equal to 100% of the aggregate principal amount outstanding of $356.4 million plus accrued and unpaid interest up to, but excluding, the redemption date.
Subsequently, during September 2025, we redeemed all remaining 2026 Senior Notes at a price equal to 100% of the aggregate principal amount outstanding of $286.7 million plus accrued and unpaid interest up to, but excluding, the redemption date.
Total net revenues increases were also driven by higher average realized sales prices of NGLs, which increased 4% for the year ended December 31, 2024 compared to the same 2023 period as a result of higher average Mont Belvieu spot prices for plant products during the year ended December 31, 2024.
Total net revenues increases were also driven by higher average realized sales prices of natural gas for the year ended December 31, 2025 compared to the same 2024 period.
For the year ended December 31, 2024 we generated pre-tax net income of $1.6 billion and recorded income tax expense of $300.3 million. During the year ended December 31, 2023, generated pre-tax net income of $1.0 billion and recorded income tax expense of $155.9 million.
These decreases were partially offset by an increase in our unrecognized tax benefit recognized during the year ended December 31, 2025. For the year ended December 31, 2024, we generated pre-tax net income of $1.6 billion and recorded income tax expense of $300.3 million.
These increases were partially offset by lower average realized sale prices for oil and natural gas which decreased 1% and 71%, respectively, for the year ended December 31, 2024 compared to the same 2023 period.
This increase was the result of higher regional and national average index gas prices between periods. 45 Table of Contents These increases were partially offset by lower average realized sale prices for oil and NGLs, which decreased 14% and 12%, respectively, for the year ended December 31, 2025 compared to the same 2024 period.
The obligations reported above represent our remaining minimum financial commitments pursuant to the terms of these contracts as of December 31, 2024, however actual expenditures may exceed the minimum commitments presented above.
The obligations reported above represent our remaining minimum financial commitments pursuant to the terms of these contracts as of December 31, 2025, however actual expenditures may exceed the minimum commitments presented above. Please refer to Note 13—Commitments and Contingencies under Part II, Item 8 of this Annual Report for details on these agreements.
Recently Issued Accounting Standards Refer to Note 1—Basis of Presentation and Summary of Significant Accounting Policies , in Part II, Item 8. Financial Statements and Supplementary Data in this annual report for a discussion of recently issued accounting standards and their anticipated effect on our business.
Recently Issued Accounting Standards Refer to Note 1—Basis of Presentation and Summary of Significant Accounting Policies , in Part II, Item 8.
Inflationary pressures such as these may also result in increases to the costs of our oilfield goods, services and personnel, which can in turn cause our capital expenditures and operating costs to rise. 2024 Highlights and Future Considerations Bolt-On Acquisition On September 17, 2024, we completed an acquisition of oil and gas properties with certain affiliates of Occidental Petroleum Corporation for total cash consideration of $743.5 million, subject to customary post-closing purchase price adjustments (the “Bolt-On Acquisition”).
Inflationary pressures such as these may also result in increases to the costs of our oilfield goods, services and personnel, which can in turn cause our capital expenditures and operating costs to rise. 2025 Highlights and Future Considerations 2025 Bolt-On Acquisitions On June 16, 2025, we completed an acquisition of approximately 13,000 net leasehold acres with Apache Corporation for an unadjusted purchase price of $608 million.
(3) Consists of an energy purchase agreement to buy a minimum amount of electricity at a fixed price or pay for underutilization as well as a take-or-pay agreement to purchase a minimum volume of frac sand at a fixed price.
Please refer to Note 15—Leases under Part II, Item 8 of this Annual Report for details on our finance lease commitments. (3) Consists of energy purchase agreements to buy a minimum amount of electricity at a fixed price or pay for underutilization as well as a take-or-pay agreement to purchase a minimum volume of frac sand at a fixed price.
These increasing factors were partially offset by lower realized prices for all commodities, higher lease operating expenses, severance and ad valorem taxes, interest expense, merger and integration expense and cash G&A expense for the year ended December 31, 2023.
These increasing factors were partially offset by lower realized prices for oil and NGLs, higher costs including lease operating expenses, GP&T expense, severance and ad valorem taxes and cash G&A as well as the timing of our receivable collections for the year ended December 31, 2025 as compared to the same 2024 period.
Year Ended December 31, (in thousands) 2024 2023 Income before income taxes $ 1,550,851 $ 1,035,648 Income tax expense (300,342) (155,945) Our provision for income taxes for the years ended December 31, 2024 and 2023 differs from the amounts that would be provided by applying the statutory U.S. federal income tax rate of 21% to pre-tax book income primarily due to (i) the portion of pre-tax net income that is attributable to our non-controlling interest and which is therefore not taxable to the Company; (ii) other permanent differences; and (iii) state income taxes.
Our provision for income tax expense for the year ended December 31, 2025 was less than the amounts that would be provided by applying the statutory U.S. federal income tax rate of 21% to pre-tax book income primarily due to (i) the portion of pre-tax net income that is attributable to our noncontrolling interest partners that is not taxable to the Company; and (ii) general business tax credits generated during the year.
The following table summarizes interest expense for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 Credit Facility $ 16,062 $ 30,049 5.375% Senior Notes due 2026 15,556 15,557 7.75% Senior Notes due 2026 14,016 23,250 6.875% Senior Notes due 2027 6,397 24,500 8.00% Senior Notes due 2027 44,000 7,333 3.25% Convertible Senior Notes due 2028 5,524 5,525 5.875% Senior Notes due 2029 41,124 41,125 9.875% Senior Notes due 2031 49,376 8,229 7.00% Senior Notes due 2032 70,000 12,347 6.25% Senior Notes due 2033 25,347 — Amortization of debt issuance costs, debt discount and debt premium 6,563 16,078 Interest capitalized — (7,813) Loss on extinguishment of debt 8,585 — Other interest expense 2,206 1,029 Total $ 304,756 $ 177,209 Interest expense was $127.5 million higher for the year ended December 31, 2024 compared to the year ended December 31, 2023 mainly due to (i) $77.8 million in additional interest expense incurred for the senior notes assumed in the Earthstone Merger on November 1, 2023; (ii) $57.7 million in higher interest incurred on our senior notes due 2032 that were issued in September and December 2023; and (iii) $25.3 million in additional interest incurred on our 2033 Senior Notes that were issued in July 2024.
The following table summarizes interest expense for the periods indicated: Year Ended December 31, (in thousands) 2025 2024 Credit Facility $ 9,536 $ 16,062 5.375% Senior Notes due 2026 11,153 15,556 7.75% Senior Notes due 2026 — 14,016 6.875% Senior Notes due 2027 — 6,397 8.00% Senior Notes due 2027 44,000 44,000 3.25% Convertible Senior Notes due 2028 1,382 5,524 5.875% Senior Notes due 2029 41,124 41,124 9.875% Senior Notes due 2031 33,198 49,376 7.00% Senior Notes due 2032 70,000 70,000 6.25% Senior Notes due 2033 62,500 25,347 Amortization of debt issuance costs, debt discount and debt premium 8,023 6,563 Other interest expense 2,146 2,206 Total $ 283,062 $ 296,171 Interest expense was $13.1 million lower for the year ended December 31, 2025 compared to the year ended December 31, 2024 mainly due to (i) $45.1 million less interest incurred between periods due to various redemptions and repurchases of our senior notes during the 2024 and 2025 periods (refer to Note 5—Long-Term Debt under Part II, Item 8 of this Annual Report for additional information regarding these transactions); and (ii) less interest expense incurred on our credit facility due to lower weighted average borrowings outstanding during the 2025 period.
Additionally, during the year ended December 31, 2024, we declared and paid variable dividends totaling $0.39 per share of Class A Common Stock and distributions totaling $0.39 per share of Class C Common Stock. The cash dividends and distributions paid totaled $560.9 million for the year ended December 31, 2024.
The cash dividends and distributions paid to common unitholders totaled $502.9 million for the year ended December 31, 2025. Additionally, we repurchased 4.4 million shares of Class A Common Stock for $46.8 million and 2.0 million shares of Class C Common Stock for $26.9 million under our Repurchase Program during the year ended December 31, 2025.
While cash G&A increased between periods, on a per Boe basis our cash G&A rate decreased 23% from $1.21 per Boe during the year ended December 31, 2023 to $0.93 per Boe during the year ended December 31, 2024 as a result of improved operational execution and realization of cost synergies following the Earthstone Merger. Merger and integration expense.
While cash G&A increased between periods, on a per Boe basis our cash G&A rate decreased 11% from $0.93 per Boe during the year ended December 31, 2024 to $0.83 per Boe during the year ended December 31, 2025. This per Boe rate decrease was the result of focus on controlling costs and growing production. Other Income and Expense.
Net gains and losses are a function of (i) changes in derivative fair values associated with fluctuations in the forward price curves for the commodities underlying each of our hedge contracts outstanding and (ii) monthly cash settlements on any closed out hedge positions during the period. 54 Table of Contents The following table presents gains and losses on our derivative instruments for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 Realized cash settlement gains (losses) $ 77,203 $ 99,410 Non-cash mark-to-market derivative gain (loss) 17,783 14,606 Total $ 94,986 $ 114,016 Income Tax Expense: The following table summarizes our pre-tax income and income tax expense for the periods indicated.
Net gains and losses are a function of (i) changes in derivative fair values associated with fluctuations in the forward price curves for the commodities underlying each of our hedge contracts outstanding and (ii) monthly cash settlements on any closed out hedge positions during the period.
Our first quarterly base dividend payment of $0.15 per share under our updated return 46 Table of Contents of capital strategy was declared and paid during the fourth quarter of 2024. The decision to pay any future dividends is solely within the discretion of, and subject to approval by, our Board of Directors.
Our quarterly base dividend was set at $0.15 per share ($0.60 annually) during the year ended December 31, 2025, and was increased to $0.16 per share ($0.64 annually) for the year ended December 31, 2026. The decision to pay any future dividends is solely within the discretion of, and subject to approval by, our Board of Directors.
Cash provided by operating activities increased primarily due to higher production volumes, higher cash settlements on derivatives as well as the timing of our receivable collections for the year ended December 31, 2023 as compared to the same 2022 period.
Cash provided by operating activities increased primarily due to (i) higher production volumes, realized derivative gains and realized prices for gas, (ii) lower merger and integration and interest expense, and (iii) the timing of payments to our suppliers for the year ended December 31, 2025 as compared to the same 2024 period.
This increase in LOE was primarily related to our significantly higher well count between periods due to (i) wells acquired in the Earthstone Merger on November 1, 2023 that operated for the entire year of 2024 compared to two months in 2023; and (ii) additional wells placed on production since December 31, 2023. Severance and Ad Valorem Taxes.
While LOE per Boe decreased period over period, total LOE for the year ended December 31, 2025 increased by $67.9 million compared to the year ended December 31, 2024 and was the direct result of our higher well count between periods primarily due to additional wells placed on production or acquired since December 31, 2024. Severance and Ad Valorem Taxes.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2023 Annual Report on Form 10-K filed with the SEC for a discussion of the results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2024 Annual Report on Form 10-K filed with the SEC for a discussion of the results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023. 48 Table of Contents Liquidity and Capital Resources Overview Our primary sources of liquidity have been cash flows from operations, borrowings under our revolving credit facility, proceeds from offerings of debt or equity securities, or proceeds from the sale of oil and gas properties.
For further information on the Credit Agreement, refer to Note 5—Long-Term Debt under Item 8 of this Annual Report. Convertible Senior Notes On March 19, 2021, OpCo issued $150.0 million of 3.25% senior unsecured convertible notes due 2028 (the “Convertible Senior Notes”).
For further information on the Credit Agreement, refer to Note 5—Long-Term Debt under Item 8 of this Annual Report. Senior Notes OpCo has $3.5 billion in debt outstanding as of December 31, 2025 , consisting of senior unsecured notes with maturity dates ranging from 2027 to 2033.
For the year ended December 31, 2023, cash flows from operating activities, cash on hand, $1.0 billion in proceeds from the issuance of our senior notes due 2032 and sales proceeds from divestitures together with contingent consideration of $175.4 million from the sale of oil and natural gas properties were used to (i) fund $1.5 billion of drilling and development cash expenditures; (ii) repay $830.0 million of borrowings outstanding from Earthstone’s credit facility that were assumed at closing of the Earthstone Merger; (iii) repay net borrowings of $385.0 million under our Credit Agreement; (iv) pay $236.0 million in 56 Table of Contents dividends and cash distributions to holders of our Common Units; (v) fund acquisitions of oil and gas properties of $234.3 million; and (vi) repurchase $162.4 million of our common stock.
For the year ended December 31, 2025, cash flows from operating activities, cash on hand and proceeds of $176.7 million primarily from the sale of oil and natural gas gathering systems that were acquired during a prior year acquisition were used to (i) fund $1.97 billion of drilling and development cash expenditures; (ii) fund acquisitions of oil and gas properties of approximately $1.1 billion; (iii) pay $502.9 million in dividends and cash distributions to shareholders and holders of our Common Units; (iv) redeem $464.5 million of our senior notes; and (v) repurchase $73.7 million of our Class A and C Common Stock.
Revenues are a function of oil, natural gas and NGL volumes sold and average commodity prices realized. Net production volumes for oil, natural gas, and NGLs increased 64%, 85% and 97%, respectively, between periods.
Oil, NGL and Natural Gas Sales Revenues . Total net revenues for the year ended December 31, 2025 increased by $64.5 million, or 1%, compared to the year ended December 31, 2024. Revenues are a function of oil, NGL and natural gas volumes sold and average commodity prices realized.
Please refer to Note 16—Leases under Part II, Item 8 of this Annual Report for details on our finance lease commitments.
(4) Consists of firm transportation commitment agreements that guarantee volumetric capacity on pipelines for gas transportation. Please refer to Note 13—Commitments and Contingencies under Part II, Item 8 of this Annual Report for details on these agreements.
Market prices in the Permian Basin were further impacted by low demand as a result of current pipeline capacity constraints out of the basin and additional pipeline maintenance, which led to negative regional gas prices being realized at the Waha Hub in West Texas (“Waha”) during the second and third quarters of 2024.
Throughout 2024 and 2025, natural gas prices in the Permian Basin were negatively impacted by low demand as a result of pipeline capacity constraints out of the basin, pipeline maintenance, and higher production levels.
In addition, during the year ended December 31, 2024, we declared and paid variable dividends totaling $0.39 per share of Class A Common Stock and distributions totaling $0.39 per share of Class C Common Stock. The cash dividends and distributions paid to common unitholders totaled $560.9 million for the year ended December 31, 2024.
Return of Capital Program During the year ended December 31, 2025, we declared and paid quarterly base dividends totaling $0.60 per share of Class A Common Stock and distributions totaling $0.60 per share of Class C Common Stock (each of which has an underlying common unit of OpCo (“Common Units”)).
The results of operations from the Bolt-On Acquisition were included in our financial and operational data beginning on September 17, 2024. 2024 Asset Acquisitions During the year ended December 31, 2024, we completed multiple other acquisitions of oil and natural gas properties for a cumulative adjusted purchase price of approximately $392.3 million.
The acreage acquired is predominately located directly offsetting our existing asset position in the core of our New Mexico operating area. Additionally, during the year ended December 31, 2025, we completed multiple acquisitions of oil and natural gas properties for a cumulative adjusted purchase price of approximately $471.1 million.
As of February 21, 2025, there were 225 registered holders of record of our Class A Common Stock and 48 registered holders of record of our Class C Common Stock. Stock Performance Graph The following performance graph and related information shall deemed to be furnished, but not filed with the SEC.
The following performance graph and related information shall be deemed to be furnished, but not filed with the SEC. Dividend Policy We plan to return capital to shareholders through a combination of base dividends and opportunistic share repurchases.
Gathering, Processing and Transportation Expenses. GP&T costs for the year ended December 31, 2024 increased $94.3 million compared to the year ended December 31, 2023.
While our GP&T per Boe was lower period versus period, total GP&T for the year ended December 31, 2025 increased $16.5 million compared to the year ended December 31, 2024.
Additionally, we repurchased 3.8 million shares of Class C Common Stock for $61.0 million under our stock repurchase program during the year ended December 31, 2024. Going forward, we plan to return capital to shareholders primarily through our recently enhanced base dividend, in addition to opportunistic share repurchases.
We plan to return capital to shareholders primarily through our base dividend, in addition to opportunistic share repurchases.
These increases in oil volumes were partially offset by normal production declines across our existing wells.
Net production volumes for oil, NGLs and natural gas increased 14%, 17% and 12%, respectively, between periods. The increase in oil production resulted from additional production added from wells placed online or acquired since the fourth quarter of 2024. These oil volume increases were partially offset by normal production declines across our existing wells.
The 1% decrease in the average realized oil price was mainly the result of 2% lower NYMEX crude prices between periods, which was slightly offset by improved oil differentials.
The 14% decrease in the average realized oil price was mainly the result of lower NYMEX crude prices between periods. The 12% decrease in the average realized NGL price between periods was primarily attributable to lower Mont Belvieu spot prices for plant products for the year ended December 31, 2025 compared to the same 2024 period. Operating Expenses.
Additionally, GP&T increased on a per Boe basis from $1.26 for the year ended December 31, 2023 to $1.46 per Boe for the year ended December 31, 2024.
Gathering, processing and transportation costs (“GP&T”) on a per Boe basis decreased from $1.46 for the year ended December 31, 2024 to $1.40 per Boe for the year ended December 31, 2025. This decrease in rate was mainly attributable to lower GP&T rates based on the location of new wells placed on production since the fourth quarter of 2024.
Removed
Stock Repurchase Program During the year ended December 31, 2024, our Board of Directors authorized a new share repurchase program of $1 billion of the Company’s outstanding Common Stock (“New Repurchase Program”), replacing the existing $500 million stock repurchase program.
Added
As of February 20, 2026, there were 264 registered holders of record of our Class A Common Stock and 4 registered holders of record of our Class C Common Stock.
Removed
Issuer Purchases of Equity Securities During the three months ended December 31, 2024, we did not purchase any Common Stock in the open market under our stock repurchase program. Dividend Policy We historically have returned capital to shareholders through a combination of base dividends plus a variable return framework, comprised of variable dividends and/or share repurchases.
Added
As of December 31, 2025, we have approximately $926.3 million available under the Repurchase Program. During the three months ended December 31, 2025, we did not repurchase any Common Stock in the open market under our Repurchase Program. ITEM 6. [Reserved] 42 Table of Contents ITEM 7.

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Biggest changeCompliance with one or more of these and other air pollution control and permitting requirements and rules has the potential to delay the development of natural gas, oil and NGL projects and increase our costs of development and production, which costs could be significant. 21 Table of Contents Regulation of GHG Emissions and Climate Change In response to findings that emissions of carbon dioxide, methane and other GHGs endanger public health and the environment, the EPA has adopted regulations under existing provisions of the CAA that, among other things, establish Prevention of Significant Deterioration (“PSD”) preconstruction and Title V operating permit reviews for GHG emissions from certain large stationary sources that are already potential major sources of certain principal, or criteria, pollutant emissions.
Biggest changeRegulation of GHG Emissions and Climate Change In response to findings that emissions of carbon dioxide, methane and other GHGs endanger public health and the environment, the EPA has adopted regulations under existing provisions of the CAA that, among other things, establish Prevention of Significant Deterioration (“PSD”) preconstruction and Title V operating permit reviews for GHG emissions from certain large stationary sources that are already potential major sources of certain principal, or criteria, pollutant emissions and impose performance standards for reducing methane emissions from oil and gas operations through limitations on venting and flaring and the implementation of enhanced emission leak detection and repair requirements.
Regulation of Production of Oil and Natural Gas The production of oil, natural gas and NGLs is subject to regulation under a wide range of local, state and federal statutes, rules, orders and regulations. Federal, state and local statutes and regulations require permits for drilling operations, drilling bonds and reports concerning operations.
Regulation of Production of Oil and Natural Gas The production of oil, NGLs and natural gas is subject to regulation under a wide range of local, state and federal statutes, rules, orders and regulations. Federal, state and local statutes and regulations require permits for drilling operations, drilling bonds and reports concerning operations.
The effect of these regulations is to limit the amount of oil, natural gas and NGLs that we can produce from our wells and to limit the number of wells or the locations where we can drill, although we can apply for exceptions to such regulations or to have reductions in well spacing or density.
The effect of these regulations is to limit the amount of oil, NGLs and natural gas that we can produce from our wells and to limit the number of wells or the locations where we can drill, although we can apply for exceptions to such regulations or to have reductions in well spacing or density.
However, the failure to comply with these rules and regulations can result in substantial penalties. Regulation of Sales and Transportation of Oil Sales of oil, condensate and NGLs from our producing wells are not currently regulated and are made at negotiated prices. Nevertheless, Congress could enact price controls in the future.
However, the failure to comply with these rules and regulations can result in substantial penalties. Regulation of Sales and Transportation of Oil Sales of oil, NGLs and condensate from our producing wells are not currently regulated and are made at negotiated prices. Nevertheless, Congress could enact price controls in the future.
Drilling fluids, produced waters and other wastes associated with the exploration, development and production of oil, natural gas and NGLs, if properly handled, are currently exempt from regulation as hazardous waste under RCRA and, instead, are regulated under RCRA’s less stringent nonhazardous solid waste provisions, state laws or other federal laws.
Drilling fluids, produced waters and other wastes associated with the exploration, development and production of oil, NGLs and natural gas, if properly handled, are currently exempt from regulation as hazardous waste under RCRA and, instead, are regulated under RCRA’s less stringent nonhazardous solid waste provisions, state laws or other federal laws.
We currently own, lease or operate numerous properties that have been used for oil, natural gas and NGL exploration, production and processing for many years.
We currently own, lease or operate numerous properties that have been used for oil, NGL and natural gas exploration, production and processing for many years.
There continues to be uncertainty as to the federal government’s jurisdictional reach under the CWA, including with respect to wetlands. The EPA and the U.S. Army Corps of Engineers (the “Corps”) under the Obama, Trump and Biden administrations have pursued multiple rulemakings since 2015 in attempt of determining the scope of such reach.
There continues to be uncertainty as to the federal government’s jurisdictional reach under the CWA, including with respect to wetlands. The EPA and the U.S. Army Corps of Engineers (the “Corps”) under the Obama, Trump and Biden administrations have pursued multiple rulemakings since 2015 in the attempt of determining the scope of such reach.
Subsurface Injections In the course of our operations, we produce water in addition to natural gas, crude oil and NGLs. Produced water that is not recycled may be disposed of in disposal wells, which inject the produced water into non-producing subsurface formations.
Subsurface Injections In the course of our operations, we produce water in addition to crude oil, NGLs and natural gas. Produced water that is not recycled may be disposed of in disposal wells, which inject the produced water into non-producing subsurface formations.
Increased costs associated with the transportation and disposal of produced water, including the cost of complying with regulations concerning produced water disposal, may reduce our profitability; however, these costs are commonly incurred by all oil, natural gas and NGL producers, and we do not believe that the costs associated with the disposal of produced water will affect our operations in any way that is of material difference from those of our competitors who are similarly situated.
Increased costs associated with the transportation and disposal of produced water, including the cost of complying with regulations concerning produced water disposal, may reduce our profitability; however, these costs are commonly incurred by all oil, NGL and natural gas producers, and we do not believe that the costs associated with the disposal of produced water will affect our operations in any way that is of material difference from those of our competitors who are similarly situated.
The rules make it unlawful, in connection with the purchase or sale of natural gas or the purchase or sale of transportation services subject to the jurisdiction of FERC, for any entity, directly or indirectly, to: (i) use or employ any device, scheme or artifice to defraud; (ii) make any untrue statement of material fact or omit to make any such statement necessary to make the statements made not misleading; or (iii) engage in any act or practice that operates as a fraud or deceit upon any person.
The issued rules make it unlawful, in connection with the purchase or sale of natural gas or the purchase or sale of transportation services subject to the jurisdiction of FERC, for any entity, directly or indirectly, to: (i) use or employ any device, scheme or artifice to defraud; (ii) make any untrue statement of material fact or omit to make any such statement necessary to make the statements made not misleading; or (iii) engage in any act or practice that operates as a fraud or deceit upon any person.
We may conduct operations on oil and natural gas leases in areas where certain species that are listed as threatened or endangered are known to exist, including the Dunes Sagebrush Lizard and Lesser Prairie Chicken (the listing decisions of which are currently subject to ongoing litigation), and where other species that potentially could be listed as threatened or endangered under the ESA may exist.
We may conduct operations on oil and natural gas leases in areas where certain species that are , were or are candidates to be listed as threatened or endangered are known to exist, including the Dunes Sagebrush Lizard and Lesser Prairie Chicken (the listing decisions of which are currently subject to ongoing litigation), and where other species that potentially could be listed as threatened or endangered under the ESA may exist.
The rule also establishes a “Super Emitter Response Program” that would trigger certain operator investigation and repair requirements in response to an emissions event exceeding 200 pounds per hour, as detected by regulatory authorities or qualified third parties.
The 2024 NSPS rule also establishes a “Super Emitter Response Program” that would trigger certain operator investigation and repair requirements in response to an emissions event exceeding 200 pounds per hour, as detected by regulatory authorities or qualified third parties.
Intrastate oil pipeline transportation rates are subject to regulation by state regulatory commissions. The basis for intrastate oil pipeline regulation, and the degree of regulatory oversight and scrutiny given to intrastate oil pipeline rates, varies from state to state. We rely on third-party pipeline systems to transport the majority of crude oil produced by ours wells.
Intrastate oil pipeline transportation rates are subject to regulation by state regulatory commissions. The basis for intrastate oil pipeline regulation, and the degree of regulatory oversight and scrutiny given to intrastate oil pipeline rates, varies from state to state. We rely on third-party pipeline systems to transport the majority of crude oil produced by our wells.
In addition, the EPA has adopted rules requiring the monitoring and annual reporting of GHG emissions from large GHG emission sources in the United States, including certain onshore and offshore natural gas, oil and NGL production sources, which include certain of our operations.
The EPA has also adopted rules requiring the monitoring and annual reporting of GHG emissions from large GHG emission sources in the United States, including certain onshore and offshore natural gas, oil and NGL production sources, which include certain of our operations.
We generally sell our oil, natural gas and NGL production to purchasers at prevailing market prices, which in certain cases are adjusted for contractual differentials, and the majority of our revenue contracts have terms greater than twelve months. 15 Table of Contents We normally sell production to a relatively small number of customers, as is customary in our business.
We generally sell our oil, NGL and natural gas production to purchasers at prevailing market prices, which in certain cases are adjusted for contractual differentials, and the majority of our revenue contracts have terms greater than twelve months. We normally sell production to a relatively small number of customers, as is customary in our business.
However, since crude oil and natural gas are fungible products with well-established markets and numerous purchasers that are based on current demand for oil and natural gas, we believe that the loss of any major purchaser would not have a material adverse effect on our financial condition or results of operations.
However, since crude oil and natural gas are 14 Table of Contents fungible products with well-established markets and numerous purchasers that are based on current demand for oil and natural gas, we believe that the loss of any major purchaser would not have a material adverse effect on our financial condition or results of operations.
Among other matters, the EP Act of 2005 amended the NGA to add an anti-market manipulation provision that 17 Table of Contents makes it unlawful for any entity to engage in prohibited behavior to be prescribed by FERC, and furthermore provides FERC with additional civil penalty authority.
Among other matters, the EP Act of 2005 amended the NGA to add an anti-market manipulation provision that makes it unlawful for any entity to engage in prohibited behavior to be prescribed by FERC, and furthermore provides FERC with additional civil penalty authority.
The Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), also known as the Superfund law, and comparable state laws impose joint and several liability, without regard to fault or the legality of conduct, on classes of persons who are considered to be responsible for the release of a hazardous substance into the environment.
The Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), also known as the Superfund law, and comparable state laws impose joint and several liability, without regard to fault or the legality of conduct, on classes of persons considered responsible for the release of a hazardous substance into the environment.
The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. 25 Table of Contents
The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. 22 Table of Contents
Many states, including Texas and New Mexico, have promulgated rules related to the public disclosure of substances used in hydraulic fluid and testing requirements for water wells near drilling sites.
Many states, including Texas and New Mexico, have promulgated rules related to the 20 Table of Contents public disclosure of substances used in hydraulic fluid and testing requirements for water wells near drilling sites.
However, it is possible that certain oil and natural gas drilling and production wastes currently classified as nonhazardous solid wastes could be re-classified as hazardous wastes in the future, as RCRA requires the EPA to periodically review (and revise if necessary) such determinations.
However, it is possible that certain oil and natural gas drilling and production wastes currently classified as nonhazardous solid wastes could be re-classified as 17 Table of Contents hazardous wastes in the future, as RCRA requires the EPA to periodically review (and revise if necessary) such determinations.
More recently, in February 2024, the EPA issued a final rule lowering the primary annual NAAQS for particulate matter 2.5 from 12.0 μg per cubic meter to 9.0 μg per cubic meter.
For example, in February 2024, the EPA issued a final rule lowering the primary annual NAAQS for particulate matter 2.5 from 12.0 μg per cubic meter to 9.0 μg per cubic meter.
The CEA also prohibits knowingly delivering or causing to be delivered false or misleading or knowingly inaccurate reports concerning market information or conditions that affect or tend to affect the price of a commodity.
The CEA also prohibits knowingly delivering or causing to be delivered false or misleading or knowingly inaccurate reports concerning market information or conditions that affect or tend to affect the 16 Table of Contents price of a commodity.
These seismic events have also led to an increase in tort lawsuits filed against exploration and 20 Table of Contents production companies, as well as the owners of underground injection wells.
These seismic events have also led to an increase in tort lawsuits filed against exploration and production companies, as well as the owners of underground injection wells.
Owners or operators of a facility, vessel or pipeline that is a source of an oil discharge or that poses the substantial threat of discharge is one type of “responsible party” who is liable.
Owners or operators of a facility, vessel or pipeline that is a source of an oil discharge or that poses the substantial threat of discharge is one type of “responsible 18 Table of Contents party” who is liable.
To the extent any action expands the scope of the CWA in areas where we or our suppliers, customers or service providers operate or imposes new or enhanced permitting requirements, our operations could be adversely impacted by increased compliance costs and energy infrastructure project delays or cancellations.
NWP 12 is expected to be reissued by the Corps in 2026. To the extent any action expands the scope of the CWA in areas where we or our suppliers, customers or service providers operate or imposes new or enhanced permitting requirements, our operations could be adversely impacted by increased compliance costs and energy infrastructure project delays or cancellations.
However, any such adverse regulatory developments are expected to have no more than a minimal impact on our results, given our limited exposure of leases on federal lands. 23 Table of Contents ESA and Migratory Birds The federal Endangered Species Act (“ESA”) and comparable state laws were established to protect endangered and threatened species.
However, any such adverse regulatory developments are expected to have no more than a minimal impact on our results, given our limited exposure of leases on federal lands. Protected Species The federal Endangered Species Act (“ESA”) and comparable state laws were established to protect endangered and threatened species.
Although the costs of managing hazardous waste may be significant, we do not believe that our costs in this regard are materially more burdensome than those for similarly situated companies.
While the costs of managing waste (including hazardous waste) may be insignificant, we do not believe that our costs in this regard are materially more burdensome than those of similarly situated companies.
The EPA finalized updates to NSPS regulations applicable to oil and natural gas sources in December 2023 , which, among other things, requires the phase out of routine flaring of natural gas from new oil wells, routine leak monitoring, detection and repair obligations at all well sites and compressor stations, and reductions in emissions via capture and control systems or the use of zero-emission equipment in certain processes.
The EPA’s 2024 updates to NSPS regulations applicable to oil and natural gas sectors require, among many things, the phase out of routine flaring of natural gas from new oil wells, routine leak monitoring, detection and repair obligations at all well sites and compressor stations, and reductions in emissions via capture and control systems or the use of zero-emission equipment in certain processes.
Regulation of Transportation and Sales of Natural Gas Historically, the transportation and sale of natural gas in interstate commerce have been regulated by agencies of the U.S. federal government, primarily FERC. In the past, the federal government regulated the prices at which natural gas could be sold.
Regulation of Transportation and Sales of Natural Gas Historically, the transportation and sale of natural gas in interstate commerce have been regulated by agencies of the U.S. federal government, primarily FERC.
Whether the air quality in a particular region is in “attainment” with the NAAQS for a particular pollutant impacts the stringency of certain air quality controls and restrictions in that area.
Whether the air quality in a particular region is in “attainment” with the NAAQS for a particular pollutant impacts the stringency of certain air quality controls and restrictions in that area. The EPA periodically reviews each NAAQS and determines whether a revision is necessary.
Pursuant to the ESA, if a species is listed as threatened or endangered, restrictions may be imposed on activities adversely affecting that species’ habitat. Similar protections are offered to migratory birds under the Migratory Bird Treaty Act (“MBTA”).
Pursuant to the ESA, if a species is listed as threatened or endangered, restrictions may be imposed on activities adversely affecting that species’ habitat. Similar protections are offered to migratory birds under the Migratory Bird Treaty Act (“MBTA”). The extent of regulatory restrictions imposed by these laws depends on the implementing regulations promulgated by the U.S.
The table below summarizes the purchasers that accounted for 10% or more of our total net revenues for the periods presented: Year Ended December 31, 2024 2023 2022 Shell Trading (US) Company 31 % 20 % 21 % Enterprise Crude Oil, LLC 19 % 30 % 18 % BP America 11 % 20 % 34 % During these periods, no other purchaser accounted for 10% or more of our net revenues.
The table below summarizes the purchasers that accounted for 10% or more of our total net revenues in at least one of the periods presented: Year Ended December 31, 2025 2024 2023 Enterprise Crude Oil, LLC 34 % 19 % 30 % Shell Trading (US) Company (1) 31 % 20 % BP America (1) 11 % 20 % (1) During the year ended December 31, 2025, these customers accounted for less than 10% of our total net revenues.
Numerous governmental entities, including the U.S. 18 Table of Contents Environmental Protection Agency (the “EPA”) and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them, often requiring costly investigation or actions.
Numerous governmental entities, including the EPA and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them, often requiring costly investigation or actions.
We also have office space in Carlsbad, New Mexico; Denver, Colorado; Eunice, New Mexico; Gardendale, Texas; Greenwood, Texas; Pecos, Texas; San Angelo, Texas; and Woodlands, Texas. Available Information Our internet website address is www.permianres.com. We routinely post important information for investors on our website.
Marienfeld Street, Suite 1000, Midland, Texas, 79701, and our telephone number is (432) 695-4222. We also have offices located in Carlsbad, New Mexico; Denver, Colorado; Eunice, New Mexico; Gardendale, Texas; Greenwood, Texas; Pecos, Texas; San Angelo, Texas; and Woodlands, Texas. Available Information Our internet website address is www.permianres.com. We routinely post important information for investors on our website.
Our competitors in the oil and natural gas industry are subject to the same regulatory requirements and restrictions that affect our operations, and as a result we do not expect compliance with such regulatory requirements to affect our operations in any way that is of material difference from our competitors who are similarly situated.
Moreover, New Mexico and Texas impose a production or severance tax with respect to the production and sale of oil, NGLs and natural gas within their jurisdiction. 15 Table of Contents Our competitors in the oil and natural gas industry are subject to the same regulatory requirements and restrictions that affect our operations, and as a result we do not expect compliance with such regulatory requirements to affect our operations in any way that is of material difference from our competitors who are similarly situated.
As of December 31, 2024, we had 482 total employees. In addition, we hire independent contractors on an as needed basis and maintain an at-will employment relationship with our employees, without collective bargaining agreements or contracts guaranteeing ongoing employment.
As of December 31, 2025, we had approximately 515 total employees. In addition, we hire independent contractors on an as needed basis. We are not a party to any collective bargaining agreements. We maintain an at-will employment relationship with our employees, and have not entered into any contracts guaranteeing ongoing employment.
Operations on federal lands are also subject to the National Environmental Policy Act (“NEPA”). NEPA requires federal agencies, including the BLM, to evaluate major actions having the potential to significantly impact the environment.
Federal oil and gas leasing programs have also been, from time to time, suspended by executive order or subject to collateral litigation. Operations on federal lands are also subject to the National Environmental Policy Act (“NEPA”). NEPA requires federal agencies, including the BLM, to evaluate major actions having the potential to significantly impact the environment.
In addition, OSHA’s hazard communication standard, the Emergency Planning and Community Right-to-Know Act, the EPA’s Risk Management Program rule and comparable state statutes and their implementing regulations require that we organize and/or disclose information about hazardous materials used or produced in our operations and that this information be provided to employees, state and local governmental authorities and citizens.
In addition, OSHA’s hazard communication standard, the Emergency Planning and Community Right-to-Know Act, the EPA’s Risk Management Program rule and comparable state statutes, and their implementing regulations require that we organize and/or disclose information about hazardous materials used or produced in our operations and that this information be provided to employees, state and local governmental authorities and citizens. 21 Table of Contents Related Permits and Authorizations Many environmental laws require us to obtain permits or other authorizations from state and/or federal agencies before initiating certain drilling, construction, production, operation or other activities and to maintain these permits and compliance with their requirements for ongoing operations.
These persons include the current and former owners or operators of the site where the release occurred and anyone who disposed or arranged for the disposal of a hazardous substance released at the site.
These persons include the current and former owners or operators of the site where the release occurred and anyone who disposed or arranged for the disposal of a hazardous substance released at the site. Under CERCLA, such persons may be subject to joint and several liability for remediation costs, damages to natural resources, and the costs of certain health studies.
In most cases, we investigate title and obtain title opinions from counsel only when we acquire producing properties or before commencement of drilling operations. Marketing and Customers We market the majority of the production from properties we operate on account of both ourselves and that of the other working interest owners in these properties.
Marketing and Customers We market the majority of the production from properties we operate on account of both ourselves and that of the other working interest owners in these properties.
Therefore, we are unable to predict the future costs or impact of compliance. Additional proposals and proceedings affecting the oil and natural gas industry are regularly considered by Congress, the states, regulatory authorities, including the Federal Energy Regulatory Commission (“FERC”), and the courts. We cannot predict when or whether any such proposals may become effective.
Additional regulatory proposals and proceedings affecting the oil and natural gas industry are regularly considered by Congress, the states, regulatory authorities, including the Federal Energy Regulatory Commission (“FERC”) and the U.S. Environmental Protection Agency (the “EPA”), and the courts. We cannot predict when or whether any such outcomes of these proceedings will materially affect our operations.
In addition, substantial limitations on GHG emissions could adversely affect demand for the natural gas, oil and NGLs we produce and lower the value of our reserves.
In addition, substantial limitations on GHG emissions could adversely affect demand for the natural gas, oil and NGLs we produce and lower the value of our reserves. Hydraulic Fracturing Activities Hydraulic fracturing is an important and common practice that is used to stimulate production of oil, NGLs and natural gas from dense subsurface rock formations.
These committed volumes are subject to under-delivery fees that would result in a financial obligation equal to a specified rate, subject to certain inflation factors.
These committed volumes are subject to under-delivery fees that would result in a financial obligation equal to a specified rate, subject to certain inflation factors. We expect our production and reserves will continue to be the primary means of fulfilling our future commitments.
The loss of any of our major purchasers could materially and adversely affect our revenues in the near-term.
During these periods, no other purchaser accounted for 10% or more of our net revenues. The loss of any of our major purchasers could materially and adversely affect our revenues in the near-term.
Under such laws, we could be required to undertake response or corrective measures, which could include removal of previously disposed substances and wastes, cleanup of contaminated property or performance of remedial plugging or pit closure operations to prevent future contamination, the costs of which could be substantial. 19 Table of Contents Water Discharges The Clean Water Act (the “CWA”) and comparable state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills, leaks of hazardous substances and placement of dredge and fill material into state waters and waters of the United States (“WOTUS”).
Under such laws, we could be required to undertake response or corrective measures, which could include removal of previously disposed substances and wastes, cleanup of contaminated property or performance of remedial plugging or pit closure operations to prevent future contamination, the costs of which could be substantial.
As such, uncertainty remains with respect to future implementation of the rule and the outcome of the pending litigation. Many of our customers and service providers rely on permits obtained under the CWA for their oil and gas pipeline projects, the most common of which is Nationwide Permit 12 (“NWP 12”).
Many of our customers and service providers rely on permits obtained under the CWA for their oil and gas pipeline projects, the most common of which is Nationwide Permit 12 (“NWP 12”). NWP 12 is, from time to time, renewed or modified by the Corps, whose actions in turn may be subject to litigation.
Failure to comply with applicable laws and regulations can result in substantial penalties. The regulatory burden on the industry increases the cost of doing business and affects profitability. Although we believe we are in substantial compliance with all applicable laws and regulations, such laws and regulations are frequently amended or reinterpreted.
Federal and state environmental and occupational health and safety laws impose certain performance or compliance standards, work practices and recordkeeping and reporting obligations on our operations. Failure to comply with applicable laws and regulations can result in substantial penalties. The regulatory burden on the industry increases the cost of doing business and affects profitability.
While Congress has, from time to time, considered legislation to reduce emissions of GHGs, no significant legislation has been adopted at the federal level.
While Congress has, from time to time, considered legislation to reduce emissions of GHGs, including proposals adopting cap-and-trade programs, carbon taxes, climate-related mitigation funds, and regulations that directly limit GHG emissions from select sources, no significant legislation has been adopted at the federal level.
We believe that our employees give us a sustainable competitive advantage, and we understand the need to attract, retain and develop the best team possible.
We believe that our employees give us a sustainable competitive advantage, and we understand the need to attract, retain and develop the best team possible. We believe the wage rates provided to our employees assist in retention of our top talent, and our compensation programs are integrated with our overall business strategies to incentivize performance and maximize shareholder returns.
While currently the areas in which we operate are not likely to be redesignated as a result of this change, if the areas in which we operate were, in the future, redesignated as nonattainment areas with respect to any NAAQS, our operations could be subjected to increased regulatory burdens in the form of more stringent emission controls, emission offset requirements and increased permitting delays and costs.
While the areas in which we operate were not likely to be redesignated as a result of this change, any adoption of a more stringent NAAQS has the potential to result in more restrictive permitting and pollution control requirements, increased permitting delays, or emission offset requirements. 19 Table of Contents Compliance with one or more of these and other air pollution control and permitting requirements and rules has the potential to delay the development of natural gas, oil and NGL projects and increase our costs of development and production, which costs could be significant.
Such maximum civil penalty authority under the NGA and NGPA has been increased to adjust for inflation. On January 14, 2025, FERC’s final rule became effective and it may now assess civil penalties under the NGA and NGPA of $1,584,648 per violation per day.
The maximum civil penalty authority under the NGA and NGPA is adjusted annually for inflation; as of January 14, 2025, FERC may now assess civil penalties under the NGA and NGPA of $1,584,648 per violation per day. The civil penalty provisions are applicable to entities that engage in the sale of natural gas for resale in interstate commerce.
The NEPA evaluation process has followed regulations issued by the Council on Environmental Quality (“CEQ”) for many years. However, recent court rulings, including a 2024 decision by the D.C. Circuit, have held that CEQ lacks legal authority to issue binding regulations governing the NEPA process.
The NEPA evaluation process has followed regulations issued by the Council on Environmental Quality (“CEQ”) for many years. However, in January 2026, CEQ issued a final rule rescinding its regulations following a D.C. Circuit decision limiting CEQ’s authority to promulgate such rules and regulations. Further, the U.S.
Any workplace injury reinforces the need for ongoing safety awareness and enhanced protocols to prevent future occurrences. Offices Our principal executive offices are located at 300 N. Marienfeld Street, Suite 1000, Midland, Texas, 79701, and our telephone number is (432) 695-4222.
While we have consistently excelled in health, safety, and environmental performance, maintaining an impressive record of minimal workplace incidents, we remain vigilant. Any workplace injury reinforces the need for ongoing safety awareness and enhanced protocols to prevent future occurrences. Offices Our principal executive offices are located at 300 N.
State or local governments may, however, elect to continue to participate in international climate change initiatives and pursue state- or regional-level climate change related regulations.
State, regional and local governments may also elect to continue to participate in international climate change initiatives, despite the Trump administration finalizing the United States’ withdrawal from such initiatives in 2026.
Additionally, we maintain a comprehensive suite of benefits that provide our employees with various options including retirement, health and wellness, and life and disability plans. We are committed to a highly qualified workforce because we believe employees with different skillsets, experiences and interests drive superior results.
We offer a variety of programs that are designed to retain our employees and also provide opportunities to grow their professional careers while continuing to deliver value to the Company. Additionally, we maintain a comprehensive suite of benefits that provide our employees with various options including retirement, health and wellness, and life and disability plans.
However, any contrary conclusion resulting from future reviews could result in an increase in our, as well as the oil, natural gas and NGL exploration and production industry’s, costs to manage and dispose of wastes, which could have a material adverse effect on our results of operations and financial position.
Any such reclassification could increase our costs (and those of the oil, NGL and natural gas exploration and production industry) to manage and dispose of wastes, and materially adversely affect our results of operations and financial position.
Through frequent training sessions and monthly safety meetings, we equip our field employees with the knowledge and tools to mitigate risks and uphold our strong safety culture. While we have consistently excelled in health, safety, and environmental performance, maintaining an impressive record of minimal workplace incidents, we remain vigilant.
We strive to promote a safe and healthy working environment, prioritizing the safety and well-being of our employees, contractors, the public, and the environment in the communities where we operate. Through frequent training sessions and monthly safety meetings, we equip our field employees with the knowledge and tools to mitigate risks and uphold our strong safety culture.
The civil penalty provisions are applicable to entities that engage in the sale of natural gas for resale in interstate commerce. On January 19, 2006, FERC issued Order No. 670, a rule implementing the anti-market manipulation provision of the EP Act of 2005, and subsequently denied rehearing.
On January 19, 2006, FERC issued Order No. 670 to implement the anti-market manipulation provision of the EP Act of 2005.
Additionally, it remains to be seen what action, if any, the Trump administration will take with respect to the repeal or revision of these regulations. The EPA is also required by the CAA to set National Ambient Air Quality Standards (“NAAQS”) for six principle pollutants that are considered harmful to public health.
The EPA’s NSPS regulatory program, and any new, more stringent emissions regulations promulgated by the EPA or any other federal or state agency, could raise our costs of regulatory compliance. The EPA is also required by the CAA to set National Ambient Air Quality Standards (“NAAQS”) for six principal pollutants that are considered harmful to public health.
The other 23 states, including New Mexico, are subject to a WOTUS-defining rule published in September 2023. Additionally, the Trump administration may pursue a new rulemaking to further revise or clarify the extent of federal jurisdiction under the CWA, though the substance and timing of such action cannot be predicted.
The other 23 states, including New Mexico, are subject to a WOTUS-defining rule published in September 2023. The Corps is currently pursuing a new post- Sackett rulemaking, the ultimate consequence of which cannot be predicted at this time.
While non-binding, agreements arising from any Conference of the Parties could result in increased pressure on politicians, regulators, financial institutions, consumers, and other stakeholders to reduce the use of, impose more stringent limitations on, increase opposition against, or reduce funding for, fossil fuels.
The participation in, or support for, climate-related policies and initiatives by politicians, regulators, financial institutions, consumers, and other stakeholders could increase opposition against, reduce funding for or lead to new limitations on, fossil fuel exploration and production activities.
However, current regulatory requirements may change, currently unforeseen environmental, health or safety incidents may occur or past non-compliance with environmental, health and safety laws or regulations may be discovered.
Although we believe we are in substantial compliance with all applicable laws and regulations, such laws and regulations are frequently amended or reinterpreted, unforeseen environmental, health or safety incidents may occur and past non-compliance may be discovered. Therefore, we are unable to predict the future costs or impact of compliance.
We currently expect our future production will satisfy all minimum volume commitments under these agreements. Title to Properties We believe that we have satisfactory title to substantially all of our producing properties in accordance with generally accepted industry standards. Individual properties may be subject to burdens such as royalty, overriding royalty, working and other outstanding interests customary in the industry.
Individual properties may be subject to burdens such as royalty, overriding royalty, working and other outstanding interests customary in the industry. In most cases, we investigate title and obtain title opinions from counsel only when we acquire producing properties or before commencement of drilling operations.
Removed
Additionally, we have a firm crude oil sales agreement that provides for firm gross sales of 29,000 Bbls/d that is based upon prevailing market prices of ICE Brent and contractual differentials that ends on May 31, 2025. The total oil volumes committed under this agreement are subject to financial ship-or-pay penalties if such physical delivery commitments are not met.
Added
Refer to Note 13—Commitments and Contingencies under Part II, Item 8 of this Annual Report for additional information on our delivery commitments. Title to Properties We believe that we have satisfactory title to substantially all of our producing properties in accordance with generally accepted industry standards.
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We believe we are in substantial compliance with currently applicable laws and regulations and that continued substantial compliance with existing requirements will not have a material adverse effect on our financial position, cash flows or results of operations.
Added
Water Discharges The Clean Water Act (the “CWA”) and comparable state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills, leaks of hazardous substances and placement of dredge and fill material into state waters and waters of the United States (“WOTUS”).
Removed
In addition, governmental, scientific, and public concern over the threat of climate change arising from increasing global greenhouse gas (“GHG”) emissions has resulted in higher political and regulatory risks in the United States.
Added
The 2024 NSPS rule further obligates states to impose these requirements on existing sources through their respective state implementation plans . In March 2025, the EPA announced an intent to reconsider the 2024 NSPS rule’s provisions into late 2026 or early 2027.
Removed
The Biden administration initiated multiple actions and rulemakings to address climate change which focused on, among other things, improving energy efficiency, 16 Table of Contents decarbonizing energy sources via electricity, hydrogen, and sustainable biofuels, restricting exploration and production activities on federal lands and reducing non-carbon dioxide GHG emissions, such as methane and nitrous oxide, all of which may impact the costs to produce, or the demand for, oil and natural gas.
Added
Because the 2024 NSPS and 2025 deadline extension rules are subject to ongoing litigation and the EPA is currently reconsidering the 2024 NSPS rule, future implementation of these regulations is uncertain at this time.
Removed
The Trump administration has announced an intention to reverse or remove support for many of these initiatives, though the extent to which, and the timeline for doing so, cannot be predicted at this time. Further, there is uncertainty as to what actions Congress will take with respect to the prior administration’s activities in this area.
Added
The Bureau of Land Management (“BLM”) has also, from time to time, considered or adopted rules regulating GHG emissions from oil and gas operation on federal lands. Nevertheless, there continues to be uncertainty surrounding the federal regulation of methane and other GHG emissions. Federal policy towards GHG emissions, and regulation thereunder, has varied significantly between the past several Presidential administrations.
Removed
Moreover, New Mexico and Texas impose a production or severance tax with respect to the production and sale of oil, natural gas and NGLs within their jurisdiction.
Added
The current Trump administration has expressed a policy preference of limiting or rescinding regulations concerning GHG emissions and promulgated a final rule, in February 2026, repealing the EPA’s 2009 “Endangerment Finding” that forms the basis for most of the EPA’s GHG-related rules.
Removed
While sales by producers of natural gas can currently be made at uncontrolled market prices, Congress could reenact price controls in the future.
Added
However, whether or how such policies and the EPA’s rescission of its “Endangerment Finding” will be implemented and if they will survive any potential legal challenges, or whether future administrations or Congress may pursue new GHG emissions regulations, cannot be predicted at this time.
Removed
In 2019, pursuant to a 2016 consent decree entered into with environmental groups, the EPA completed a review of its RCRA requirements for the management of certain oil and natural gas wastes and concluded no federal regulatory revisions were necessary.
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While Congress previously enacted the Inflation Reduction Act of 2022 (the “IRA”) to advance climate-related objectives and provide financial support for alternative or lower GHG-emitting energy production, many of these incentives were repealed or otherwise modified following the change in Presidential administrations and the enactment of the One Big Beautiful Bill Act in 2025 (“OBBBA”).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+3 added−5 removed6 unchanged
Biggest changeChanges in the fair value of derivative contracts from December 31, 2023 to December 31, 2024, are presented below: (in thousands) Commodity derivative asset (liability) Net fair value of oil and gas derivative contracts outstanding as of December 31, 2023 $ 93,573 Commodity hedge contract settlement payments, net of any receipts (77,203) Cash and non-cash mark-to-market gains (losses) on commodity hedge contracts (1) 94,986 Net fair value of oil and gas derivative contracts outstanding as of December 31, 2024 $ 111,356 (1) At inception, new derivative contracts entered into by us have no intrinsic value.
Biggest changeDifferential ($/MMBtu) Natural gas basis differential swaps (1) January 2026 - March 2026 12,330,000 137,000 $(1.34) April 2026 - June 2026 12,467,000 137,000 (2.31) July 2026 - September 2026 12,604,000 137,000 (1.42) October 2026 - December 2026 12,604,000 137,000 (1.21) January 2027 - March 2027 14,490,000 161,000 (0.47) April 2027 - June 2027 14,651,000 161,000 (1.11) July 2027 - September 2027 14,812,000 161,000 (0.65) October 2027 - December 2027 14,812,000 161,000 (0.91) (1) These natural gas basis swap contracts are settled utilizing the Inside FERC’s West Texas Waha price and the NYMEX Henry Hub price of natural gas. 54 Table of Contents Changes in the fair value of derivative contracts from December 31, 2024 to December 31, 2025, are presented below: (in thousands) Commodity derivative asset (liability) Net fair value of oil and gas derivative contracts outstanding as of December 31, 2024 $ 111,356 Commodity hedge contract settlement payments, net of any receipts (277,245) Cash and non-cash mark-to-market gains (losses) on commodity hedge contracts (1) 445,724 Net fair value of oil and gas derivative contracts outstanding as of December 31, 2025 $ 279,835 (1) At inception, new derivative contracts entered into by us have no intrinsic value.
Commodity Price Risk Our primary market risk exposure is in the pricing that we receive for our oil, natural gas and NGL production. Pricing for oil, natural gas and NGLs has been volatile and unpredictable for several years, and we expect this volatility to continue for the foreseeable future.
Commodity Price Risk Our primary market risk exposure is in the pricing that we receive for our oil, NGL and natural gas production. Pricing for oil, NGLs and natural gas has been volatile and unpredictable for several years, and we expect this volatility to continue for the foreseeable future.
As of December 31, 2024, we had no borrowings outstanding under the Credit Agreement. We do not currently have or intend to enter into any derivative hedge contracts to protect against fluctuations in interest rates applicable to our outstanding indebtedness.
As of December 31, 2025, we had no borrowings outstanding under the Credit Agreement. We do not currently have or intend to enter into any derivative hedge contracts to protect against fluctuations in interest rates applicable to our outstanding indebtedness.
The long-term debt balance of $4.2 billion consists of our senior notes, which have fixed interest rates; therefore, this balance is not affected by interest rate movements. For additional information regarding our debt instruments, see Note 5—Long-Term Debt in Item 8 of this Annual Report. 63 Table of Contents
The long-term debt balance of $3.5 billion consists of our senior notes, which have fixed interest rates; therefore, this balance is not affected by interest rate movements. For additional information regarding our debt instruments, see Note 5—Long-Term Debt in Item 8 of this Annual Report. 55 Table of Contents
The table below summarizes the terms of the derivative contracts we had in place as of December 31, 2024 and additional contracts entered into through February 21, 2025. Refer to Note 8—Derivative Instruments under Item 8 of this Annual Report for open derivative positions as of December 31, 2024. Period Volume (Bbls) Volume (Bbls/d) Wtd. Avg.
The table below summarizes the terms of the derivative contracts we had in place as of December 31, 2025 and additional contracts entered into through February 20, 2026. Refer to Note 8—Derivative Instruments under Part II, Item 8 of this Annual Report for open derivative positions as of December 31, 2025. Period Volume (Bbls) Volume (Bbls/d) Wtd. Avg.
A hypothetical upward or downward shift of 10% per Bbl in the NYMEX forward curve for crude oil as of December 31, 2024 would cause a $154.3 million increase or decrease, respectively, in this fair value position, and a hypothetical upward or downward shift of 10% per MMBtu in the NYMEX forward curve for natural gas as of December 31, 2024 would cause a $14.0 million increase or decrease, respectively, in this same fair value position.
A hypothetical upward or downward shift of 10% per Bbl in the NYMEX forward curve for crude oil as of December 31, 2025 would cause a $82.9 million increase or decrease in this fair value position, and a hypothetical upward or downward shift of 10% per MMBtu in the NYMEX forward curve for natural gas as of December 31, 2025 would cause a $36.1 million increase or decrease in this same fair value position.
Based on our production for the year ended December 31, 2024, our oil and gas sales for the year ended December 31, 2024 would have moved up or down $436.3 million for each 10% change in oil prices per Bbl, minimally for each 10% change in natural gas prices per Mcf and $63.8 million for each 10% change in NGL prices per Bbl.
Based on our production for the year ended December 31, 2025, our oil and gas sales for the year ended December 31, 2025 would have moved up or down $425.1 million for each 10% change in oil prices per Bbl, $65.9 million for each 10% change in NGL prices per Bbl and $13.2 million for each 10% change in natural gas prices per Mcf.
Gas Price ($/MMBtu) (1) Natural gas swaps January 2025 - March 2025 11,070,000 123,000 $3.44 April 2025 - June 2025 11,193,000 123,000 3.12 July 2025 - September 2025 11,316,000 123,000 3.43 October 2025 - December 2025 11,316,000 123,000 3.85 January 2026 - March 2026 8,190,000 91,000 4.08 April 2026 - June 2026 8,281,000 91,000 3.40 July 2026 - September 2026 8,372,000 91,000 3.65 October 2026 - December 2026 8,372,000 91,000 4.01 January 2027 - March 2027 12,600,000 140,000 4.24 April 2027 - June 2027 12,740,000 140,000 3.32 July 2027 - September 2027 12,880,000 140,000 3.58 October 2027 - December 2027 12,880,000 140,000 3.94 62 Table of Contents Period Volume (MMBtu) Volume (MMBtu/d) Wtd.
Gas Price ($/MMBtu) Natural gas swaps - NYMEX Henry Hub January 2026 - March 2026 12,330,000 137,000 $4.23 April 2026 - June 2026 12,467,000 137,000 3.57 July 2026 - September 2026 12,604,000 137,000 3.83 October 2026 - December 2026 12,604,000 137,000 4.16 January 2027 - March 2027 12,600,000 140,000 4.24 April 2027 - June 2027 12,740,000 140,000 3.32 July 2027 - September 2027 12,880,000 140,000 3.58 October 2027 - December 2027 12,880,000 140,000 3.94 Period Volume (MMBtu) Volume (MMBtu/d) Wtd.
Differential ($/Bbl) (2) Crude oil basis differential swaps January 2025 - March 2025 3,932,000 43,689 $1.11 April 2025 - June 2025 4,095,000 45,000 1.10 July 2025 - September 2025 4,140,000 45,000 1.10 October 2025 - December 2025 4,140,000 45,000 1.10 January 2026 - March 2026 1,575,000 17,500 1.15 April 2026 - June 2026 1,592,500 17,500 1.15 July 2026 - September 2026 1,610,000 17,500 1.15 October 2026 - December 2026 1,610,000 17,500 1.15 Period Volume (Bbls) Volume (Bbls/d) Wtd.
Differential ($/Bbl) Crude oil basis differential swaps (1) January 2026 - March 2026 4,485,000 49,833 $0.94 April 2026 - June 2026 6,324,500 69,500 0.91 July 2026 - September 2026 3,634,000 39,500 1.02 October 2026 - December 2026 3,634,000 39,500 1.02 Period Volume (Bbls) Volume (Bbls/d) Wtd. Avg.
Crude Price ($/Bbl) (1) Crude oil swaps January 2025 - March 2025 4,050,000 45,000 $75.21 April 2025 - June 2025 4,095,000 45,000 73.87 July 2025 - September 2025 4,140,000 45,000 72.64 October 2025 - December 2025 4,140,000 45,000 71.60 January 2026 - March 2026 1,575,000 17,500 71.49 April 2026 - June 2026 1,592,500 17,500 70.61 July 2026 - September 2026 1,610,000 17,500 69.77 October 2026 - December 2026 1,610,000 17,500 69.08 61 Table of Contents Period Volume (Bbls) Volume (Bbls/d) Wtd.
Crude Price ($/Bbl) Crude oil swaps - NYMEX WTI January 2026 - March 2026 5,355,000 59,500 $64.62 April 2026 - June 2026 6,324,500 69,500 63.70 July 2026 - September 2026 4,554,000 49,500 65.79 October 2026 - December 2026 4,554,000 49,500 65.16 Period Volume (Bbls) Volume (Bbls/d) Wtd. Avg.
Removed
Differential ($/Bbl) (3) Crude oil roll differential swaps January 2025 - March 2025 3,932,000 43,689 $0.43 April 2025 - June 2025 4,095,000 45,000 0.44 July 2025 - September 2025 4,140,000 45,000 0.44 October 2025 - December 2025 4,140,000 45,000 0.44 January 2026 - March 2026 1,575,000 17,500 0.28 April 2026 - June 2026 1,592,500 17,500 0.28 July 2026 - September 2026 1,610,000 17,500 0.28 October 2026 - December 2026 1,610,000 17,500 0.28 (1) These crude oil swap transactions are settled based on the NYMEX WTI index price on each trading day within the specified monthly settlement period versus the contractual swap price for the volumes stipulated.
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Differential ($/Bbl) Crude oil roll differential swaps - NYMEX WTI January 2026 - March 2026 3,405,000 37,833 $0.26 April 2026 - June 2026 5,232,500 57,500 0.31 July 2026 - September 2026 2,530,000 27,500 0.33 October 2026 - December 2026 2,530,000 27,500 0.33 (1) These crude oil basis swap transactions are settled utilizing the ARGUS MIDLAND WTI and ARGUS WTI CUSHING indices. 53 Table of Contents Period Volume (MMBtu) Volume (MMBtu/d) Wtd.
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(2) These crude oil basis swap transactions are settled based on the difference between the arithmetic average of ARGUS MIDLAND WTI and ARGUS WTI CUSHING indices, during each applicable monthly settlement period.
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Avg. Gas Price ($/MMBtu) Natural gas swaps - Waha January 2026 - March 2026 8,550,000 95,000 $2.66 April 2026 - June 2026 8,645,000 95,000 0.43 July 2026 - September 2026 8,740,000 95,000 1.80 October 2026 - December 2026 15,145,000 164,620 2.73 January 2027 - March 2027 7,650,000 85,000 3.57 Period Volume (MMBtu) Volume (MMBtu/d) Wtd. Avg.
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(3) These crude oil roll swap transactions are settled based on the difference between the arithmetic average of NYMEX WTI calendar month prices and the physical crude oil delivery month price. Period Volume (MMBtu) Volume (MMBtu/d) Wtd. Avg.
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Gas Price ($/MMBtu) Natural gas swaps - HSC January 2026 - March 2026 9,000,000 100,000 4.40 April 2026 - June 2026 9,100,000 100,000 3.63 July 2026 - September 2026 9,200,000 100,000 3.95 October 2026 - December 2026 9,200,000 100,000 4.24 Period Volume (MMBtu) Volume (MMBtu/d) Wtd. Avg.
Removed
Differential ($/MMBtu) (2) Natural gas basis differential swaps January 2025 - March 2025 11,070,000 123,000 $(0.83) April 2025 - June 2025 11,193,000 123,000 (1.35) July 2025 - September 2025 11,316,000 123,000 (1.23) October 2025 - December 2025 11,316,000 123,000 (1.25) January 2026 - March 2026 8,190,000 91,000 (1.09) April 2026 - June 2026 8,281,000 91,000 (2.27) July 2026 - September 2026 8,372,000 91,000 (1.29) October 2026 - December 2026 8,372,000 91,000 (0.98) January 2027 - March 2027 12,600,000 140,000 (0.46) April 2027 - June 2027 12,740,000 140,000 (1.11) July 2027 - September 2027 12,880,000 140,000 (0.62) October 2027 - December 2027 12,880,000 140,000 (0.87) (1) These natural gas swap contracts are settled based on the NYMEX Henry Hub price on each trading day within the specified monthly settlement period versus the contractual swap price for the volumes stipulated.
Removed
(2) These natural gas basis swap contracts are settled based on the difference between the Inside FERC’s West Texas Waha Hub price and the NYMEX price of natural gas during each applicable monthly settlement period.

Other PR 10-K year-over-year comparisons