Quarterly report [Sections 13 or 15(d)]

SEGMENT REPORTING

v3.25.3
SEGMENT REPORTING
 9 Months Ended
Sep. 30, 2025
Segment Reporting [Abstract]  
SEGMENT REPORTING
NOTE 13 — SEGMENT REPORTING
In accordance with ASU 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," the Company has performed an assessment of its reporting to comply with the new requirements for the fiscal year beginning January 1, 2024 and for interim periods beginning January 1, 2025. The Company's operations consist of the exploration, production, and sale of oil, natural gas, and NGLs, primarily within the Permian Basin of Texas, and is regulated by the RRC. The Company operates different areas within the Permian Basin, including the Northwest Shelf and Central Basin Platform.
The Company's operations and financials are managed by one cohesive group of individuals, identified as the chief operating decision maker ("CODM"), consisting of the Chairman of the Board and Chief Executive Officer; Executive Vice President and Chief Operations Officer; Executive Vice President and Chief Exploration Officer; Senior Vice President of Operations; and Vice President and Interim Chief Financial Officer. The CODM group reviews the Company's operating results, including condensed financial statements on a monthly basis for evaluating performance and determining resource allocation. The significant expense categories provided to the CODM include lease operating expenses; gathering, transportation and processing costs; ad valorem taxes; and oil and natural gas production taxes. Each of these costs are deducted from oil, natural gas, and natural gas liquids revenues by operating segment to arrive at operating segment profit, used to assess performance.
The Company assessed whether its operating segments exhibited similar economic characteristics and whether its operating segments had a similar nature of products, services, production processes, purchaser types/classes, product distribution, and regulatory environment. Each operating segment has similar products (oil, natural gas, and NGLs), similar production processes, similar types of purchasers (midstream companies, or companies with midstream components), similar methods of product delivery, and is governed by the same regulations. After a thorough analysis of each of these factors with regards to the Company's operating segments, it has been determined that it is appropriate to aggregate its operating segments into a single reportable segment, Exploration and Production, which includes all of its revenues, lease operating expenses, gathering, transportation and processing costs, ad valorem taxes, and oil and natural gas production taxes. Refer to the table below.
For the Three Months Ended September 30, For the Nine Months Ended September 30,
2025 2024 2025 2024
Exploration and Production
Oil, natural gas, and natural gas liquids revenues (1)
$ 78,601,336  $ 89,244,383  $ 240,295,302  $ 282,886,868 
Lease operating expenses (2)
(20,518,472) (20,315,282) (60,442,005) (57,984,733)
Gathering, transportation and processing costs (126,569) (102,420) (463,990) (376,103)
Ad valorem taxes (2,446,565) (2,164,562) (5,627,320) (5,647,469)
Oil and natural gas production taxes (3,670,987) (4,203,851) (11,088,049) (12,259,418)
Exploration and Production segment profit $ 51,838,743  $ 62,458,268  $ 162,673,938  $ 206,619,145 
(1) All of the Company's revenues are within the Permian Basin within the United States.
(2) The CODM also reviews the following cost categories within lease operating expenses. Refer to the following table.
For the Three Months Ended September 30, For the Nine Months Ended September 30,
2025 2024 2025 2024
Lease operating expenses:
Workovers $ 3,027,065  $ 4,244,856  $ 9,017,112  $ 11,144,016 
Other lease operating expenses $ 17,491,407  $ 16,070,426  $ 51,424,893  $ 46,840,717 
Total lease operating expenses $ 20,518,472  $ 20,315,282  $ 60,442,005  $ 57,984,733 
The following tables include a reconciliation of the total reportable segments' measures of profit or loss to the Company's consolidated income (loss) before income taxes. Additionally included is a reconciliation between the reportable segments' assets to the Company's consolidated assets.
For the three months ended September 30, 2025
Exploration and Production Corporate Total Company
Oil, Natural Gas, and Natural Gas Liquids Revenues $ 78,601,336  $ —  $ 78,601,336 
Lease operating expenses (20,518,472) —  (20,518,472)
Gathering, transportation and processing costs (126,569) —  (126,569)
Ad valorem taxes (2,446,565) —  (2,446,565)
Oil and natural gas production taxes (3,670,987) —  (3,670,987)
Depreciation, depletion and amortization (3)
—  (25,225,345) (25,225,345)
Ceiling test impairment (3)
—  (72,912,330) (72,912,330)
Asset retirement obligation accretion —  (390,563) (390,563)
Operating lease expense —  (175,091) (175,091)
General and administrative expense —  (8,139,771) (8,139,771)
Interest income —  74,253  74,253 
Interest (expense) —  (10,052,320) (10,052,320)
Gain (loss) on derivative contracts —  444,305  444,305 
Gain (loss) on disposal of assets —  105,642  105,642 
Other income —  —  — 
Income (Loss) Before Benefit from (Provision for) Income Taxes $ 51,838,743  $ (116,271,220) $ (64,432,477)
Total Assets (3)
$ 1,401,663,623  $ 33,008,970  $ 1,434,672,593 
Capital expenditures $ 24,589,282  $ —  $ 24,589,282 
(3) All of the Company's assets are located within the United States. As the CODM does not view depreciation, depletion and amortization or ceiling test impairment as a significant Exploration and Production segment expense, the Company has included these amounts within the Corporate column of the reconciliation table.
For the three months ended September 30, 2024
Exploration and Production Corporate Total Company
Oil, Natural Gas, and Natural Gas Liquids Revenues $ 89,244,383  $ —  $ 89,244,383 
Lease operating expenses (20,315,282) —  (20,315,282)
Gathering, transportation and processing costs (102,420) —  (102,420)
Ad valorem taxes (2,164,562) —  (2,164,562)
Oil and natural gas production taxes (4,203,851) —  (4,203,851)
Depreciation, depletion and amortization (3)
—  (25,662,123) (25,662,123)
Ceiling test impairment (3)
—  —  — 
Asset retirement obligation accretion —  (354,195) (354,195)
Operating lease expense —  (175,091) (175,091)
General and administrative expense —  (6,421,567) (6,421,567)
Interest income —  143,704  143,704 
Interest (expense) —  (10,754,243) (10,754,243)
Gain (loss) on derivative contracts —  24,731,625  24,731,625 
Gain (loss) on disposal of assets —  —  — 
Other income —  —  — 
Income (Loss) Before Benefit from (Provision for) Income Taxes $ 62,458,268  $ (18,491,890) $ 43,966,378 
Total Assets (3)
$ 1,367,833,052  $ 31,931,958  $ 1,399,765,010 
Capital expenditures $ 42,691,163  $ —  $ 42,691,163 
(3) All of the Company's assets are located within the United States. As the CODM does not view depreciation, depletion and amortization or ceiling test impairment as a significant Exploration and Production segment expense, the Company has included these amounts within the Corporate column of the reconciliation table.
For the Nine months ended September 30, 2025
Exploration and Production Corporate Total Company
Oil, Natural Gas, and Natural Gas Liquids Revenues $ 240,295,302  $ —  $ 240,295,302 
Lease operating expenses (60,442,005) —  (60,442,005)
Gathering, transportation and processing costs (463,990) —  (463,990)
Ad valorem taxes (5,627,320) —  (5,627,320)
Oil and natural gas production taxes (11,088,049) —  (11,088,049)
Depreciation, depletion and amortization (3)
—  (73,411,242) (73,411,242)
Ceiling test impairment (3)
—  (72,912,330) (72,912,330)
Asset retirement obligation accretion —  (1,099,363) (1,099,363)
Operating lease expense —  (525,272) (525,272)
General and administrative expense —  (23,898,266) (23,898,266)
Interest income —  233,969  233,969 
Interest (expense) —  (31,308,510) (31,308,510)
Gain (loss) on derivative contracts —  14,163,569  14,163,569 
Gain (loss) on disposal of assets —  385,545  385,545 
Other income —  159,712  159,712 
Income (Loss) Before Benefit from (Provision for) Income Taxes $ 162,673,938  $ (188,212,188) $ (25,538,250)
Total Assets (3)
$ 1,401,663,623  $ 33,008,970  $ 1,434,672,593 
Capital expenditures $ 73,868,326  $ —  $ 73,868,326 
(3) All of the Company's assets are located within the United States. As the CODM does not view depreciation, depletion and amortization or ceiling test impairment as a significant Exploration and Production segment expense, the Company has included these amounts within the Corporate column of the reconciliation table.
For the Nine months ended September 30, 2024
Exploration and Production Corporate Total Company
Oil, Natural Gas, and Natural Gas Liquids Revenues $ 282,886,868  $ —  $ 282,886,868 
Lease operating expenses (57,984,733) —  (57,984,733)
Gathering, transportation and processing costs (376,103) —  (376,103)
Ad valorem taxes (5,647,469) —  (5,647,469)
Oil and natural gas production taxes (12,259,418) —  (12,259,418)
Depreciation, depletion and amortization (3)
—  (74,153,994) (74,153,994)
Ceiling test impairment (3)
—  —  — 
Asset retirement obligation accretion —  (1,057,213) (1,057,213)
Operating lease expense —  (525,272) (525,272)
General and administrative expense —  (21,604,323) (21,604,323)
Interest income —  367,181  367,181 
Interest (expense) —  (33,199,314) (33,199,314)
Gain (loss) on derivative contracts —  3,888,531  3,888,531 
Gain (loss) on disposal of assets —  89,693  89,693 
Other income —  25,686  25,686 
Income (Loss) Before Benefit from (Provision for) Income Taxes $ 206,619,145  $ (126,169,025) $ 80,450,120 
Total Assets (3)
$ 1,367,833,052  $ 31,931,958  $ 1,399,765,010 
Capital expenditures $ 114,313,003  $ —  $ 114,313,003 
(3) All of the Company's assets are located within the United States. As the CODM does not view depreciation, depletion and amortization or ceiling test impairment as a significant Exploration and Production segment expense, the Company has included these amounts within the Corporate column of the reconciliation table.
The following table discloses the purchasers from which 10% or more of revenues were derived in the years noted.
For the Three Months Ended September 30, For the Nine Months Ended September 30,
2025 2024 2025 2024
Purchasers with 10% or more percentage of total revenue (4)
Phillips 66 Company ("Phillips") 67% 62% 66% 61%
Concord Energy LLC 12% 14% 13% 14%
LPC Crude III, LLC * 14% * 13%
NGL Crude Partners ("NGL Crude") * 10% * 10%
Energy Transfer Crude Marketing 12% * * *
(4) All the Company's purchasers are within the Exploration and Production operating segment.
* Represents less than 10%