Derivative Instruments and Hedging Activities (Tables)
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6 Months Ended |
Jun. 30, 2022 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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Schedule of Offsetting Assets |
The following presents the impact of this presentation to the Company’s recognized assets and liabilities for the periods indicated:
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As of June 30, 2022 |
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Presented without |
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As Presented with |
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Effects of Netting |
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Effects of Netting |
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Effects of Netting |
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(In thousands) |
Derivative Assets |
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Fair value of derivatives - current |
$28,933 |
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($28,933) |
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$— |
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Other assets, net |
$11,485 |
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($11,485) |
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$— |
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Derivative Liabilities |
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Fair value of derivatives - current |
($330,295) |
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$28,933 |
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($301,362) |
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Fair value of derivatives - non-current |
($32,736) |
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$11,485 |
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($21,251) |
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As of December 31, 2021 |
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Presented without |
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As Presented with |
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Effects of Netting |
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Effects of Netting |
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Effects of Netting |
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(In thousands) |
Assets |
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Commodity derivative instruments |
$25,469 |
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($23,921) |
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$1,548 |
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Contingent consideration arrangements |
20,833 |
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— |
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20,833 |
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Fair value of derivatives - current |
$46,302
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($23,921) |
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$22,381
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Commodity derivative instruments |
$1,119 |
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($869) |
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$250 |
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Contingent consideration arrangements |
— |
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— |
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— |
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Other assets, net |
$1,119
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($869) |
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$250
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Liabilities |
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Commodity derivative instruments (1)
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($184,898) |
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$23,921 |
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($160,977) |
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Contingent consideration arrangements |
(25,000) |
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— |
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(25,000) |
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Fair value of derivatives - current |
($209,898) |
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$23,921
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($185,977) |
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Commodity derivative instruments |
($12,278) |
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$869 |
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($11,409) |
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Contingent consideration arrangements |
— |
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— |
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— |
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Fair value of derivatives - non-current |
($12,278) |
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$869
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($11,409) |
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(1) Includes approximately $2.9 million of deferred premiums, which will be paid as the applicable contracts settle.
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Schedule of Offsetting Liabilities |
The following presents the impact of this presentation to the Company’s recognized assets and liabilities for the periods indicated:
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As of June 30, 2022 |
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Presented without |
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As Presented with |
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Effects of Netting |
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Effects of Netting |
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Effects of Netting |
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(In thousands) |
Derivative Assets |
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Fair value of derivatives - current |
$28,933 |
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($28,933) |
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$— |
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Other assets, net |
$11,485 |
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($11,485) |
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$— |
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Derivative Liabilities |
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Fair value of derivatives - current |
($330,295) |
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$28,933 |
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($301,362) |
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Fair value of derivatives - non-current |
($32,736) |
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$11,485 |
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($21,251) |
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As of December 31, 2021 |
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Presented without |
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As Presented with |
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Effects of Netting |
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Effects of Netting |
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Effects of Netting |
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(In thousands) |
Assets |
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Commodity derivative instruments |
$25,469 |
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($23,921) |
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$1,548 |
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Contingent consideration arrangements |
20,833 |
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— |
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20,833 |
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Fair value of derivatives - current |
$46,302
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($23,921) |
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$22,381
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Commodity derivative instruments |
$1,119 |
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($869) |
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$250 |
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Contingent consideration arrangements |
— |
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— |
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— |
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Other assets, net |
$1,119
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($869) |
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$250
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Liabilities |
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Commodity derivative instruments (1)
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($184,898) |
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$23,921 |
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($160,977) |
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Contingent consideration arrangements |
(25,000) |
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— |
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(25,000) |
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Fair value of derivatives - current |
($209,898) |
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$23,921
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($185,977) |
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Commodity derivative instruments |
($12,278) |
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$869 |
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($11,409) |
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Contingent consideration arrangements |
— |
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— |
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— |
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Fair value of derivatives - non-current |
($12,278) |
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$869
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($11,409) |
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(1) Includes approximately $2.9 million of deferred premiums, which will be paid as the applicable contracts settle.
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Schedule of Gain or Loss on Derivative Contracts |
The components of “Loss on derivative contracts” are as follows for the respective periods:
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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(In thousands) |
Loss on oil derivatives |
$75,910 |
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$177,033 |
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$401,258 |
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$326,594 |
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Loss on natural gas derivatives |
5,738 |
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12,816 |
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33,919 |
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15,513 |
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Loss on NGL derivatives |
— |
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3,734 |
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4,771 |
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4,872 |
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(Gain) loss on contingent consideration arrangements |
— |
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(3,120) |
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— |
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2,617 |
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Loss on September 2020 Warrants liability (1)
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— |
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— |
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— |
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55,390 |
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Loss on derivative contracts |
$81,648
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$190,463
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$439,948
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$404,986
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(1) Further details of the Company’s September 2020 Warrants and the loss on the associated September 2020 Warrants liability are described in “Note 7 - Borrowings”, “Note 8 - Derivative Instruments and Hedging Activities” and “Note 9 - Fair Value Measurements” of the Notes to Consolidated Financial Statements in its 2021 Annual Report.
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Schedule of Derivative Instruments |
The components of “Cash paid for commodity derivative settlements, net” and “Cash received (paid) for settlements of contingent consideration arrangements, net” are as follows for the respective periods:
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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(In thousands) |
Cash flows from operating activities |
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Cash paid on oil derivatives |
($162,334) |
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($82,413) |
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($257,687) |
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($122,360) |
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Cash paid on natural gas derivatives |
(21,808) |
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(1,906) |
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(26,452) |
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(3,275) |
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Cash paid on NGL derivatives |
(2,255) |
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(1,090) |
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(3,783) |
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(1,936) |
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Cash paid for commodity derivative settlements, net |
($186,397) |
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($85,409) |
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($287,922) |
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($127,571) |
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Cash received for settlements of contingent consideration arrangements, net |
$— |
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$— |
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$6,492 |
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$— |
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Cash flows from investing activities |
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Cash paid for settlement of contingent consideration arrangement |
$— |
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$— |
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($19,171) |
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$— |
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Cash flows from financing activities |
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Cash received for settlement of contingent consideration arrangement |
$— |
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$— |
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$8,512 |
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$— |
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Schedule of Outstanding Oil and Natural Gas Derivative Contracts |
Listed in the tables below are the outstanding oil and natural gas derivative contracts as of June 30, 2022:
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For the Remainder |
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For the Full Year |
Oil Contracts (WTI) |
2022 |
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2023 |
Swap Contracts |
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Total volume (Bbls) |
3,634,000 |
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1,538,500 |
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Weighted average price per Bbl |
$64.83 |
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$81.04 |
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Collar Contracts |
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Total volume (Bbls) |
2,392,000 |
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2,730,000 |
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Weighted average price per Bbl |
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Ceiling (short call) |
$70.12 |
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$87.15 |
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Floor (long put) |
$60.00 |
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$71.92 |
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Short Call Swaption Contracts (1)
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Total volume (Bbls) |
— |
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1,825,000 |
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Weighted average price per Bbl |
$— |
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$72.00 |
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Oil Contracts (Midland Basis Differential) |
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Swap Contracts |
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Total volume (Bbls) |
1,196,000 |
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— |
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Weighted average price per Bbl |
$0.50 |
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$— |
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(1) The 2023 short call swaption contracts have exercise expiration dates of December 30, 2022.
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For the Remainder |
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For the Full Year |
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Natural Gas Contracts (Henry Hub) |
2022 |
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2023 |
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Swap Contracts |
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Total volume (MMBtu) |
6,150,000 |
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— |
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Weighted average price per MMBtu |
$3.62 |
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$— |
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Collar Contracts |
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Total volume (MMBtu) |
5,510,000 |
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6,640,000 |
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Weighted average price per MMBtu |
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Ceiling (short call) |
$5.96 |
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$6.60 |
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Floor (long put) |
$4.21 |
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$4.48 |
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Natural Gas Contracts (Waha Basis Differential) |
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Swap Contracts |
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Total volume (MMBtu) |
1,220,000 |
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6,080,000 |
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Weighted average price per MMBtu |
($0.75) |
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($0.75) |
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