NORTHERN OIL & GAS, INC.

CONDENSED BALANCE SHEETS

CONDENSED STATEMENTS OF OPERATIONS

CONDENSED STATEMENTS OF CASH FLOWS

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

`NOTE 1 ORGANIZATION AND NATURE OF BUSINESS

Northern Oil and Gas, Inc. (the “Company,” “NOG,” “our” and words of similar import), a Delaware corporation, is an independent energy company engaged as a non-operator in the acquisition, exploration, development and production of oil and natural gas properties in the United States, primarily in the Williston Basin, the Permian Basin, the Appalachian Basin, and the Uinta Basin. The Company’s common stock trades on the New York Stock Exchange under the symbol “NOG”.

The Company’s principal business is crude oil and natural gas exploration, development, and production in the United States. The Company’s primary strategy is investing in non-operated minority working and mineral interests in oil and natural gas properties, with a core area of focus in four premier basins within the United States.

NOTE 2 BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These financial statements, which are unaudited, have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Such information includes all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods. The results of operations for interim periods are not necessarily indicative of the results to be expected for an entire year.

Certain information, accounting policies, and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted in this Quarterly Report on Form 10-Q pursuant to certain rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2024, which were included in the Company’s 2024 Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Out-of-Period Adjustments

During the three months ended September 30, 2024, the Company identified certain errors in its previously issued financial statements that were corrected through cumulative out-of-period adjustments in the condensed financial statements as of and for the three and nine months ended September 30, 2024. The errors related, primarily, to improper classifications of income taxes withheld by the state of New Mexico, from January 2021 through June 2024, that were recorded as production tax expense. As a result, the Company recorded an out-of-period adjustment of approximately $32.1 million in the three months ended September 30, 2024 to record an income tax receivable, offset by a reduction in production taxes. Further, in the three months ended September 30, 2024, the Company recorded an out-of-period adjustment of approximately $6.7 million to income tax expense, offset by an increase in deferred tax liabilities. These errors understated net income for the fiscal years ended December 31, 2023, 2022, and 2021, by approximately $9.3 million, $11.2 million, and $0.5 million, respectively. Management considered qualitative and quantitative factors and concluded the out-of-period adjustments were immaterial to 2024 and each of the applicable periods.

Use of Estimates

The preparation of financial statements under GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The most significant estimates relate to proved crude oil and natural gas reserves, which include limited control over future development plans as a non-operator, estimates relating to certain crude oil and natural gas revenues and expenses, fair value of derivative instruments, acquisition date fair values of assets acquired and liabilities assumed, impairment of crude oil and natural gas properties, asset retirement obligations at initial recognition, and deferred income taxes.

Management’s estimates and assumptions were based on historical data and consideration of future market conditions. Given the uncertainty inherent in any projection, actual results may differ from the estimates and assumptions used, and conditions may change, which could materially affect amounts reported in the unaudited condensed financial statements.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date, as applicable. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

In November 2024, the FASB issued ASU 2024-04 Debt - Debt With Conversion and Other Options (Subtopic 470-20): Induced Conversion of Convertible Debt Instruments. The objective of the standard is to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt with Conversion and Other Options. This standard will affect entities that settle convertible debt instruments for which the conversion privileges are changed to induce conversion. ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company does not expect the adoption of this standard to have a material impact on its financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The objective of the standard is to provide disaggregated information about a public business entity’s expenses to help investors better understand the components of an entity’s expenses, which should enable investors to better assess an entity’s prospects for future cash flows. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The adoption of this standard is not expected to have an impact on our financial statements but it will result in more detailed and enhanced footnote disclosures.

Revenue Recognition

The Company’s revenues are primarily derived from its interests in the sales of oil and natural gas production. The Company recognizes revenue from its interests in the sales of crude oil and natural gas in the period that its performance obligations are satisfied. Performance obligations are satisfied when the customer obtains control of the product, when the Company has no further obligations to perform related to the sale, when the transaction price has been determined and when collectability is probable. The sales of oil and natural gas are made under contracts which the third-party operators of the wells have negotiated with customers, which typically include variable consideration that is based on pricing tied to local indices and volumes delivered in the current month. The Company receives payment from the sale of oil and natural gas production fromone tothree months after delivery. At the end of each month when the performance obligation is satisfied, the variable consideration can be reasonably estimated and amounts due from customers are accrued in accounts receivable, net in the condensed balance sheets. Variances between the Company’s estimated revenue and actual payments are recorded in the month the payment is received. Historically, differences have been insignificant. Accordingly, the variable consideration is not constrained.

The Company does not disclose the value of unsatisfied performance obligations under its contracts with customers as it applies the practical expedient exemption, which applies to variable consideration that is recognized as control of the product is transferred to the customer. Since each unit of product represents a separate performance obligation, future volumes are wholly unsatisfied, and disclosure of the transaction price allocated to remaining performance obligations is not required.

The Company’s oil is typically sold at delivery points under contract terms that are common in our industry. The Company’s natural gas produced is delivered by the well operators to various purchasers at agreed upon delivery points under a limited number of contract types that are also common in our industry. Regardless of the contract type, the terms of these contracts compensate the well operators for the value of the oil and natural gas at specified prices, and then the well operators will remit payment to the Company for its share in the value of the oil and natural gas sold.

In June 2025, the Company entered into a settlement and mutual release agreement (the “Settlement Agreement”) with an operator in North Dakota (the “Operator”). Pursuant to the Settlement Agreement, the Operator and the Company have settled and permanently released certain claims of the Company relating to certain post-production costs previously deducted from revenues. Pursuant to the settlement, the Company received approximately $81.7 million, recorded within Oil and Gas Sales in the accompanying condensed statements of operations. The Company received a net cash settlement of $48.6 million after deducting approximately $33.1 million in legal settlement expenses. The cash proceeds were received in the third quarter of 2025.

The Company reports volumes and revenues on atwo-stream basis. Accordingly, the Company’s disaggregated revenue hastwo primary sources: (i) oil sales and (ii) natural gas and NGL sales. Substantially all of the Company’s sales come from four operating areas in the United States: the Williston Basin, the Permian Basin, the Appalachian Basin, and the Uinta Basin.

The following table presents the disaggregation of the Company’s oil revenues and natural gas and NGL revenues for thethree and nine months ended September 30, 2025 and 2024.

(1)Balances for the nine months ended September 30, 2025 include $81.7 million in legal settlement from an Operator in North Dakota.

Concentrations of Market, Credit Risk and Other Risks

The future results of the Company’s crude oil and natural gas operations will be affected by the market prices of crude oil and natural gas. The availability of a ready market for crude oil and natural gas products in the future will depend on numerous factors beyond the control of the Company, including weather, imports, marketing of competitive fuels, proximity and capacity of crude oil and natural gas pipelines and other transportation facilities, any oversupply or undersupply of crude oil, natural gas and liquid products, the regulatory environment, the economic environment, and other regional and political events, none of which can be predicted with certainty.

The Company operates in the exploration, development and production sector of the crude oil and natural gas industry. The Company’s receivables include amounts due, indirectly via the third-party operators of the wells, from purchasers of its crude oil and natural gas production. While certain of these customers, as well as third-party operators of the wells, are affected by periodic downturns in the economy in general or in their specific segment of the crude oil or natural gas industry, the Company believes that its level of credit-related losses due to such economic fluctuations have been immaterial.

As a non-operator, 100% of the Company’s wells are operated by third-party operating partners. As a result, the Company is highly dependent on the success of these third-party operators. If they are not successful in the exploration, development and production activities relating to the Company’s leasehold interests, or are unable or unwilling to perform, the Company’s financial condition and results of operations could be adversely affected. These risks are heightened in a low commodity price environment, which may present significant challenges to these third-party operators. The Company’s third-party operators will make decisions in connection with their operations that may not be in the Company’s best interests, and the Company may have little or no ability to exercise influence over the operational decisions of its third-party operators. For the three months ended September 30, 2025, the Company’s top four operators made up 42% of total oil and natural gas sales, with two operators comprising more than 10% but less than 15%. For the nine months ended September 30, 2025, the Company’s top four operators made up 40% of total oil and natural gas sales, with two operators comprising more than 10% but less than 15%. For the three months ended September 30, 2024, the Company’s top four operators made up 40% of total oil and natural gas sales, with one operator comprising more than 10% but less than 15%. For the nine months ended September 30, 2024, the Company’s top four operators made up 39% of total oil and natural gas sales, with one operator comprising more than 10% but less than 15%.

The Company faces concentration risk due to the fact that substantially all of its oil and natural gas revenue is sourced from a limited number of geographic areas of operations. As a result, the Company is disproportionately exposed to risks that affect one or more of those areas in the Williston Basin, the Permian Basin, the Appalachian Basin and the Uinta Basin.

The Company manages and controls market and counterparty credit risk. In the normal course of business, collateral is not required for financial instruments with credit risk. Financial instruments which potentially subject the Company to credit risk consist principally of cash balances and derivative financial instruments. The Company maintains cash and cash equivalents in bank deposit accounts which, at times, may exceed the federally insured limits. The Company has not experienced any significant losses from such investments. The Company attempts to limit the amount of credit exposure to any one financial institution or company. The Company believes the credit quality of its counterparties is generally high. In the normal course of business, letters of credit or parent guarantees may be required for counterparties which management perceives to have a higher credit risk.

Net Income (Loss) Per Common Share

Basic earnings per share (“EPS”) are computed by dividing net income (loss) attributable to common stockholders (the numerator) by the weighted average number of common shares outstanding for the period (the denominator). Diluted EPS is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include shares issuable upon exercise of stock warrants and vesting of restricted stock awards, and shares issuable upon conversion of the Convertible Notes (see Note 4). The number of potential common shares outstanding are calculated using the treasury stock or if-converted method.

In those reporting periods in which the Company has reported net income available to common stockholders, anti-dilutive shares generally are comprised of the restricted stock that has average unrecognized stock compensation expense greater than the average stock price. In those reporting periods in which the Company has a net loss, anti-dilutive shares are comprised of the impact of those number of shares that would have been dilutive had the Company had net income plus the number of common stock equivalents that would be anti-dilutive had the company had net income.

Restricted stock awards are excluded from the calculation of basic weighted average common shares outstanding until they vest. For restricted stock awards that vest based on achievement of performance and/or market conditions, the number of contingently issuable common shares included in diluted weighted-average common shares outstanding is based on the number of common shares, if any, that would be issuable under the terms of the arrangement if the performance and/or market conditions were met at the end of the reporting period, assuming the result would be dilutive.

The reconciliation of the denominators used to calculate basic EPS and diluted EPS for the three and nine months ended September 30, 2025 and 2024 are as follows:

Supplemental Cash Flow Information

The following table reflects the Company’s supplemental cash flow information for the three and nine months ended September 30, 2025 and 2024:

NOTE 3 CRUDE OIL AND NATURAL GAS PROPERTIES

The Company follows the full cost method of accounting to account for its crude oil and natural gas operations, whereby all costs related to the exploration and development of crude oil and natural gas properties are capitalized into a single cost center (“full cost pool”). Such costs include land acquisition costs, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling directly related to acquisition, and exploration activities. Internal costs that are capitalized are directly attributable to acquisition, exploration and development activities and do not include costs related to production, general corporate overhead or similar activities. Costs associated with production and general corporate activities are expensed in the period incurred.

Under the full cost method of accounting, the Company is required to perform a ceiling test each quarter. The test determines a limit, or ceiling, on the book value of the Company’s oil and natural gas properties. Net capitalized costs are limited to the lower of unamortized cost net of deferred income taxes, or the cost center ceiling. As a result of its ceiling test, the Company recorded a non-cash impairment charge of approximately $318.7 million and $434.3 million in the three and nine months ended September 30, 2025, respectively. The Company didnot have any impairment charges in the three and nine months ended September 30, 2024.

Average commodity prices have declined in recent months. If this downward trend continues, and/or if our proved reserves decrease significantly in future months, the present value of the Company’s future net revenues could decline significantly, which could trigger the need for the Company to record an additional non-cash ceiling test impairment of its oil and natural gas property costs in future periods.

The book value of the Company’s crude oil and natural gas properties consists of all acquisition costs (including cash expenditures and the value of stock consideration), drilling costs and other associated capitalized costs. Acquisitions are accounted for as purchases and, accordingly, the results of operations are included in the accompanying condensed statements of operations from the closing date of the acquisition.

2025 Acquisitions

During the three and nine months ended September 30, 2025, the Company acquired oil and natural gas properties through a number of smaller independent transactions for a total of $59.8 million and $95.8 million, respectively.

In August 2025, the Company completed its acquisition of certain oil and natural gas properties, interests and related assets in the Uinta basin from a private seller, effective July 1, 2025. The total consideration paid to the seller at closing, net to the Company, was approximately $98.3 million in cash, a portion of which was funded by a $9.8 million acquisition deposit paid in June 2025.

In April 2025, the Company completed its acquisition of certain oil and natural gas properties, interests and related assets in the Midland Permian basin from a private seller, effective June 1, 2024. The total consideration paid to the seller at closing, net to the Company, was approximately $61.7 million in cash, a portion of which was funded by a $4.0 million acquisition deposit paid in February 2025.

2024 Acquisitions

In addition to the closing of the Delaware Acquisition, as defined below, during the three and nine months ended September 30, 2024, the Company acquired oil and natural gas properties through a number of smaller independent transactions for a total of $11.1 million and $26.0 million, respectively.

Delaware Acquisition

In January 2024, the Company completed its acquisition of certain oil and natural gas properties, interests and related assets in the Delaware Basin from a private seller, effective as of November 1, 2023 (the “Delaware Acquisition”).

The total consideration paid to the seller at closing included 107,657 shares of common stock and $147.8 million in cash, a portion of which was funded by a $17.1 million deposit paid at signing in November 2023.

The results of operations from the date of the Delaware Acquisition through September 30, 2024 represented approximately $33.1 million of revenue and $14.7 million of income from operations.

The Company accounted for the Delaware Acquisition as a business combination. Accordingly, transaction costs of approximately $0.6 million were included in general and administrative expense in the Company’s statements of operations. The following table reflects the fair values of the net assets and liabilities as of the closing date of the acquisition:

Point Acquisition

In September 2024, the Company completed its acquisition of certain oil and natural gas properties located in the Delaware Basin from Point Energy Partners, LLC (“Point”), effective as of April 1, 2024 (the “Point Acquisition”). At closing, the Company acquired a 20% undivided working interest in the assets sold by Point, with Vital Energy, Inc., an unaffiliated third party, acquiring the other 80% and becoming the operator of the acquired assets.

The total consideration paid to the seller at closing, net to the Company, was $205.1 million in cash, a portion of which was funded by a $22.0 million acquisition deposit paid in July 2024. As a result of customary post-closing adjustments, the Company reduced its proved oil and natural gas properties and total consideration by $7.2 million subsequent to closing.

The Company accounted for the Point Acquisition as an asset acquisition, as substantially all of the fair value of the gross assets acquired were concentrated in a group of similar identifiable assets. Accordingly, approximately $2.8 million transaction costs were capitalized to the full cost pool of the oil and natural gas properties acquired.

XCL Acquisition

In October 2024, the Company completed its acquisition of certain oil and natural gas properties in the Uinta Basin from XCL Resources, LLC and certain affiliated entities (“XCL”), effective as of May 1, 2024 (the “XCL Acquisition”). At closing, the Company acquired a 20% undivided working interest in the assets sold by XCL, with SM Energy Company, an unaffiliated third party, acquiring the other 80% and becoming the operator of the acquired assets.

The total consideration paid to the seller at closing, net to the Company, was $511.3 million in cash, a portion of which was funded by a $25.5 million acquisition deposit paid in June 2024.

The Company accounted for the XCL Acquisition as an asset acquisition, as substantially all of the fair value of the gross assets acquired were concentrated in a group of similar identifiable assets. Accordingly, approximately $9.4 million transaction costs were capitalized to the full cost pool of the oil and natural gas properties acquired.

Unproved Properties

All properties that are not classified as proved properties are considered unproved properties and, thus, the costs associated with such properties are not subject to depletion until the properties are evaluated for reserves. Once a property is evaluated, all associated acreage and drilling costs are subject to depletion.

The Company historically has acquired unproved properties by purchasing individual or small groups of leases directly from mineral owners, landmen, or lease brokers, which leases historically have not been subject to specified drilling projects, and by purchasing lease packages in identified project areas controlled by specific operators. The Company generally participates in drilling activities on a heads up basis by electing whether to participate in each well on a well-by-well basis at the time wells are proposed for drilling.

The Company believes that the majority of its unproved property will be evaluated, and thus the related costs will become subject to depletion within the next five years. The timing by which all unproved properties will become subject to depletion will be dependent upon the timing of future drilling activities and delineation of its reserves.

Capitalized costs associated with evaluated leasehold costs, which includes leases that have expired or have been deemed uneconomic, and capitalized costs related to properties having proved reserves, plus the estimated future development costs and asset retirement costs, are depleted and amortized using the unit-of-production method. Under this method, depletion is calculated at the end of each period by multiplying total production for the period by a depletion rate. The depletion rate is determined by dividing the total unamortized cost base plus future development costs by net equivalent proved reserves at the beginning of the period. The costs of unproved properties are withheld from the depletion base until such time that they are evaluated.

When unproved properties are evaluated, their cost is added to costs subject to depletion and full cost ceiling calculations. For the three months ended September 30, 2025 and 2024, unproved properties of $1.4 million and $1.6 million, respectively, were transferred to evaluated leasehold costs. For the nine months ended September 30, 2025 and 2024, unproved properties of $7.0 million and $3.3 million, respectively, were transferred to evaluated leasehold costs.

NOTE 4 LONG-TERM DEBT

The Company’s long-term debt consists of the following:

(1)Unamortized debt issuance costs related to the Company’s Revolving Credit Facility of $6.7 million and $9.0 million as of September 30, 2025 and December 31, 2024, are recorded in “Other Noncurrent Assets, Net” in the balance sheets.

(2)Subsequent to September 30, 2025, in October 2025, upon successfully completing the issuance of $725.0 million in aggregate principal amount of its Senior Notes due 2033 (as defined herein), the Company repurchased approximately 97.14% of its outstanding Senior Notes due 2028, representing approximately $684.9 million in aggregate principal amount, for a total amount of $699.9 million, inclusive of tender premium and accrued interest due. Approximately $20.2 million in aggregate principal of the Senior Notes due 2028 remained outstanding after the Repurchase Event (as defined below).

Revolving Credit Facility

In June 2022, the Company entered into a Third Amended and Restated Credit Agreement (as amended, modified, or supplemented through the date of this filing, the “Revolving Credit Facility”) with Wells Fargo Bank, National Association, as administrative agent and collateral agent (“Agent”), and the lenders from time to time party thereto, which amended and restated the Company’s prior revolving credit facility that was entered into in November 2019. As of September 30, 2025, the Revolving Credit Facility was scheduled to mature on June 7, 2027.

Subsequent to September 30, 2025, in November 2025, the Company entered into a Fourth Amended and Restated Credit Agreement governing the Revolving Credit Facility (the “Fourth Amendment and Restatement”), which extended the maturity date to November 2030, and made certain other changes noted below.

The Revolving Credit Facility is comprised of revolving loans and letters of credit and is subject to a borrowing base with maximum loan value to be assigned to the proved reserves attributable to the Company and its subsidiaries’ (if any) oil and natural gas properties. As of September 30, 2025, the borrowing base was $1.8 billion and the aggregate elected commitment amount was $1.6 billion. These amounts were unchanged by the Fourth Amendment and Restatement. The Company’s borrowing availability under the Revolving Credit Facility is set at the lesser of the borrowing base and the elected commitment amount. The borrowing base will be redetermined semiannually on or around April 1 and October 1, with one interim “wildcard” redetermination available to each of the Company and the Agent (acting at the direction of the lenders holding at least two-thirds of commitments and loans outstanding under the Revolving Credit Facility) between scheduled redeterminations. Upon an acquisition of oil and natural gas properties with an aggregate value exceeding 5% of the borrowing base, the Company may request an additional redetermination. The Company has the option to seek commitments for term loans, which such term loans (if obtained) are capped at the least of (i) the borrowing base minus the aggregate elected commitment amount minus the then-outstanding principal amount of term loans, (ii) the aggregate elected commitment amount minus the then-outstanding principal amount of term loans and (iii) $500.0 million. Such term loans are subject to certain other terms of the Revolving Credit Facility.

At the Company’s option, borrowings under the Revolving Credit Facility shall bear interest at the base rate or SOFR plus an applicable margin. Base rate loans bear interest at a rate per annum equal to the greatest of: (i) the Agent bank’s prime rate; (ii) the federal funds effective rate plus 50 basis points; and (iii) the adjusted SOFR rate for a one-month interest period plus 100 basis points. The applicable margin for base rate loans ranges from 125 to 225 basis points (which was reduced to 75 to 175 basis points by the Fourth Amendment and Restatement), and the applicable margin for SOFR loans ranges from 225 to 325 basis points (which was reduced to 175 to 275 basis points by the Fourth Amendment and Restatement), in each case depending on the percentage of the borrowing base utilized.

The Revolving Credit Facility contains customary events of default and affirmative and negative covenants. In addition, the Revolving Credit Facility requires that the Company comply with the following financial covenants: (i) the Net Leverage Ratio (as defined in the Revolving Credit Facility) shall be no more than 3.50 to 1.00, and (ii) the Current Ratio (as defined in the Revolving Credit Facility) shall not be less than 1.00 to 1.00. The Company was in compliance with all applicable covenants as of September 30, 2025.

The Company’s obligations under the Revolving Credit Facility are secured by mortgages on not less than 90% (which was reduced to 85% by the Fourth Amendment and Restatement) of the value of proven reserves associated with the oil and natural gas properties included in the determination of the borrowing base. Additionally, the Company entered into a Guaranty and Collateral Agreement in favor of the Agent for the secured parties, pursuant to which the Company’s obligations under the Revolving Credit Facility are secured by a first priority security interest in substantially all of the Company’s assets.

Senior Notes due 2028

In February 2021, the Company and Wilmington Trust, National Association, as trustee, entered into an indenture (the “2028 Notes Indenture”), pursuant to which the Company issued $550.0 million in aggregate principal amount of 8.125% senior notes due 2028 (the “Original 2028 Notes”). In November 2021, the Company issued an additional $200.0 million aggregate principal amount of 8.125% senior notes due 2028 (together with the Original 2028 Notes, the “Senior Notes due 2028”). The proceeds of the Senior Notes due 2028 were used primarily to refinance existing indebtedness, and for general corporate purposes.

During 2022, the Company repurchased and retired $25.8 million in aggregate principal amount of the Senior Notes due 2028 in open market transactions for a total of $24.9 million in cash, plus accrued interest. During 2023, the Company repurchased and retired $19.1 million in aggregate principal amount of the Senior Notes due 2028 in open market transactions for a total of $18.4 million in cash, plus accrued interest. As of September 30, 2025, the Company’s liability under the 2028 Notes Indenture was approximately $705.1 million.

The Senior Notes due 2028 will mature on March 1, 2028. Interest is payable semi-annually in arrears on each March 1 and September 1 to holders of record on the February 15 and August 15 immediately preceding the related interest payment date, at a rate of 8.125% per annum. The Company may redeem all or a part of the Senior Notes due 2028 at redemption prices (expressed as percentages of principal amount) equal to 102.031% through February 28, 2026, and 100% beginning on March 1, 2026, plus accrued and unpaid interest to, but excluding, the redemption date.

If a Change of Control Triggering Event (as defined in the 2028 Notes Indenture) occurs, each holder of Senior Notes due 2028 may require the Company to repurchase all or any part of that holder’s Senior Notes due 2028 for cash at a price equal to 101% of the aggregate principal amount of the Senior Notes due 2028 repurchased, plus any accrued and unpaid interest on the Senior Notes due 2028 repurchased to, but excluding, the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date on or prior to the date of purchase).

The 2028 Notes Indenture contains customary events of default and affirmative and negative covenants. As of September 30, 2025, the Company was in compliance with all applicable covenants.

In September 2025, the Company announced a cash tender offer for any and all of its outstanding Senior Notes due 2028, upon the terms and conditions set forth in the Offer to Purchase, dated as of September 22, 2025, and the related Letter of Transmittal and Notice of Guaranteed Delivery (the “Tender Offer”).

Pursuant to the terms of the Tender Offer, holders who validly tendered their Senior Notes due 2028 prior to 5:00 p.m., New York City time, on September 26, 2025, and whose Senior Notes due 2028 were accepted for purchase were entitled to receive the tender consideration equal to $1,015 per $1,000 principal amount of Senior Notes due 2028 accepted for purchase. The Tender Offer was contingent upon, among other things, the Company’s consummation, on terms and conditions satisfactory to the Company, of the Company’s concurrent offering for the Senior Notes due 2033 and the receipt of net proceeds therefrom.

Subsequent to September 30, 2025, in October 2025, upon successfully completing the issuance of its Senior Notes due 2033, the Company repurchased approximately 97.14% of its outstanding Senior Notes due 2028, representing approximately $684.9 million in aggregate principal amount, for a total amount of $699.9 million, inclusive of tender premium and accrued interest due (the “Repurchase Event”). The Repurchase Event resulted in a loss on debt extinguishment of approximately $10.8 million, primarily due to the tender premium. Approximately $20.2 million in aggregate principal of the Senior Notes due 2028 remained outstanding after the Repurchase Event.

Convertible Notes due 2029

In October 2022, the Company and Wilmington Trust, National Association, as trustee, entered into an indenture (as supplemented, the “Convertible Notes Indenture”), pursuant to which the Company issued $500.0 million in aggregate principal amount of 3.625% convertible senior notes due 2029 (the “Original Convertible Notes”). On June 17, 2025, the Company issued an additional $200.0 million in aggregate principal amount of 3.625% convertible senior notes due 2029 (the “Additional Convertible Notes” and, together with the Original Convertible Notes, the “Convertible Notes”), at an issue price of 105.597% of the principal amount thereof. The proceeds of the Convertible Notes were used to refinance existing indebtedness and for other general corporate purposes. The Convertible Notes mature on April 15, 2029, unless earlier repurchased, redeemed or converted. The Convertible Notes accrue interest at a rate of 3.625% per annum, payable semi-annually in arrears on April 15 and October 15 of each year.

Before October 16, 2028, noteholders have the right to convert their Convertible Notes only upon the occurrence of certain events. From and after October 16, 2028, noteholders may convert their Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will have the right to elect to settle conversions either entirely in cash or in a combination of cash and shares of its common stock. However, upon conversion of any Convertible Notes, the conversion value, which will be determined over a period of 40 trading days, will be paid in cash up to at least the principal amount of the Convertible Notes being converted. The conversion rate and conversion price are subject to customary anti-dilution and other adjustments upon the occurrence of certain events. As of September 30, 2025, the conversion rate was 27.1209 shares of common stock per $1,000 principal amount of Convertible Notes, which represented a conversion price of approximately $36.87 per share of common stock. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Convertible Notes Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

The Convertible Notes are redeemable, in whole or in part (subject to certain limitations), at the Company’s option at any time, and from time to time, on or after April 15, 2026 and on or before the 40 th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling any Convertible Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Convertible Note, in which case the conversion rate applicable to the conversion of that Convertible Note will be increased in certain circumstances if it is converted after it is called for redemption. Notwithstanding the foregoing, the Company has agreed not to call any Additional Convertible Notes for redemption until the Additional Convertible Notes are “freely tradeable” (as defined in the Convertible Notes Indenture) pursuant to the provison to the first sentence of the definition thereof.

If certain corporate events that constitute a “Fundamental Change” (as defined in the Convertible Notes Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their Convertible Notes at a cash repurchase price equal to the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.

The Convertible Notes Indenture contains customary events of default and affirmative and negative covenants. As of September 30, 2025, the Company was in compliance with all applicable covenants.

Capped Call Transactions

In October 2022, in connection with the Original Convertible Notes offering described above, the Company entered into privately negotiated capped call transactions (the “Original Capped Call Transactions”) with certain of the initial purchasers of the Original Convertible Notes and/or their respective affiliates and/or other financial institutions. The Company paid $36.1 million in total consideration to enter into the Original Capped Call Transactions. The Original Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Convertible Notes, the number of shares of common stock initially underlying the Original Convertible Notes. The Original Capped Call Transactions are expected generally to reduce potential dilution to the common stock upon any conversion of Original Convertible Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of such converted Original Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the Original Capped Call Transactions was initially approximately $52.17 per share of common stock, which represents a premium of 75% over the last reported sale price of the common stock of $29.81 per share on October 11, 2022, and is subject to certain customary adjustments under the terms of the Original Capped Call Transactions.

In June 2025, in connection with the Additional Convertible Notes offering described above, the Company entered into new privately negotiated capped call transactions (the “Additional Capped Call Transactions”). The Additional Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Convertible Notes, the number of shares of common stock initially underlying the Additional Convertible Notes. The Additional Capped Call Transactions are expected generally to reduce potential dilution to the common stock upon any conversion of Additional Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of such converted Additional Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the Additional Capped Call Transactions was initially approximately $50.61 per share of common stock, which represents a premium of approximately 63% over the last reported sale price of the common stock of $31.15 per share on June 12, 2025, and is subject to certain customary adjustments under the terms of the Additional Capped Call Transactions.

As of September 30, 2025, the cap price was approximately $50.33 per share of common stock for both the Original Capped Call Transactions and the Additional Capped Call Transactions.

Senior Notes due 2031

In May 2023, the Company and Wilmington Trust, National Association, as trustee, entered into an indenture (the “2031 Notes Indenture”), pursuant to which the Company issued $500.0 million in aggregate principal amount of the Company’s 8.750% senior notes due 2031 (the “Senior Notes due 2031”). The proceeds of the Senior Notes due 2031 were used primarily to refinance existing indebtedness, and for general corporate purposes.

The Senior Notes due 2031 will mature on June 15, 2031. Interest is payable semi-annually in arrears on each June 15 and December 15, to holders of record on the June 1 and December 1 immediately preceding the related interest payment date, at a rate of 8.750% per annum. Prior to June 15, 2026, the Company may redeem up to 35% of the aggregate principal amount of Senior Notes due 2031, upon not less than 10 or more than 60 days’ notice, at a redemption price of 108.750% of the principal amount of the Senior Notes due 2031 redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date), in an amount not greater than the net cash proceeds of one or more equity offerings by the Company, provided that (i) at least 65% of the aggregate principal amount of Senior Notes due 2031 issued under the 2031 Notes Indenture (including any Additional Notes (as defined in the 2031 Notes Indenture) but excluding the Senior Notes due 2031 held by the Company and its Subsidiaries (as defined in the 2031 Notes Indenture)) remains outstanding immediately after the occurrence of such redemption (unless all Senior Notes due 2031 are redeemed substantially concurrently) and (ii) the redemption occurs within 180 days of the date of the closing of each such equity offering. In addition, prior to June 15, 2026, the Company may redeem all or a part of the Senior Notes due 2031, on any one or more occasions, upon not less than 10 or more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the Senior Notes due 2031 redeemed, plus an applicable make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).

On or after June 15, 2026, the Company may redeem all or a part of the Senior Notes due 2031 at redemption prices (expressed as percentages of principal amount) equal to 104.375% for the twelve-month period beginning on June 15, 2026,102.188% for the twelve-month period beginning on June 15, 2027, and 100% beginning on June 15, 2028, plus accrued and unpaid interest to, but excluding, the redemption date.

If a Change of Control Triggering Event (as defined in the 2031 Notes Indenture) occurs, each holder of Senior Notes due 2031 may require the Company to repurchase all or any part of that holder’s Senior Notes due 2031 for cash at a price equal to 101% of the aggregate principal amount of the Senior Notes due 2031 repurchased, plus any accrued and unpaid interest on the Senior Notes due 2031 repurchased to, but excluding, the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date on or prior to the date of purchase).

The 2031 Notes Indenture contains customary event of default and certain affirmative and negative covenants. As of September 30, 2025, the Company was in compliance with all applicable covenants.

Senior Notes due 2033

Subsequent to September 30, 2025, in October 2025, the Company and Wilmington Trust, National Association, as trustee, entered into an indenture (the “2033 Notes Indenture”), pursuant to which the Company issued $725.0 million in aggregate principal amount of the Company’s 7.875% senior notes due 2033 (the “Senior Notes due 2033”). The proceeds of the Senior Notes due 2033 were used primarily to fund the purchase of the Senior Notes due 2028 validly tendered and accepted for purchase pursuant to the Tender Offer, and for general corporate purposes.

The Senior Notes due 2033 will mature on October 15, 2033. Interest is payable semi-annually in arrears on each April 15 and October 15, to holders of record on the April 1 and October 1 immediately preceding the related interest payment date, at a rate of 7.875% per annum. Prior to October 15, 2028, the Company may redeem up to 40% of the aggregate principal amount of Senior Notes due 2033, upon not less than 10 or more than 60 days’ notice, at a redemption price of 107.875% of the principal amount of the Senior Notes due 2033 redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date), in an amount not greater than the net cash proceeds of one or more equity offerings by the Company, provided that (i) at least 60% of the aggregate principal amount of Senior Notes due 2033 issued under the 2033 Notes Indenture (including any Additional Notes (as defined in the 2033 Notes Indenture) but excluding the Senior Notes due 2033 held by the Company and its Subsidiaries (as defined in the 2033 Notes Indenture)) remains outstanding immediately after the occurrence of such redemption (unless all Senior Notes due 2033 are redeemed substantially concurrently) and (ii) the redemption occurs within 180 days of the date of the closing of each such equity offering. In addition, prior to October 15, 2028, the Company may redeem all or a part of the Senior Notes due 2033, on any one or more occasions, upon not less than 10 or more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the Senior Notes due 2033 redeemed, plus an applicable make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).

On or after October 15, 2028 the Company may redeem all or a part of the Senior Notes due 2033 at redemption prices (expressed as percentages of principal amount) equal to 103.938% for the twelve-month period beginning on October 15, 2028,101.969% for the twelve-month period beginning on October 15, 2029, and 100% beginning on October 15, 2030, plus accrued and unpaid interest to, but excluding, the redemption date.

If a Change of Control Triggering Event (as defined in the 2033 Notes Indenture) occurs, each holder of Senior Notes due 2033 may require the Company to repurchase all or any part of that holder’s Senior Notes due 2033 for cash at a price equal to 101% of the aggregate principal amount of the Senior Notes due 2033 repurchased, plus any accrued and unpaid interest on the Senior Notes due 2033 repurchased to, but excluding, the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date on or prior to the date of purchase).

The 2033 Notes Indenture contains customary event of default and certain affirmative and negative covenants.

NOTE 5 COMMON AND PREFERRED STOCK

Common Stock

On May 23, 2024, the Company filed an amendment to its certificate of incorporation, which was effective upon filing, to increase the number of authorized shares of common stock, par value $0.001 per share, from 135,000,000 to 270,000,000, as approved by the Company’s stockholders at the 2024 Annual Meeting of Stockholders on May 23, 2024. As of September 30, 2025, the Company had 97,602,978 shares of common stock issued and outstanding.

Preferred Stock

The Company is authorized to issue up to 5,000,000 shares of preferred stock, par value $0.001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2025, the Company hadzero shares of preferred stock issued and outstanding.

2025 Activity

Common Stock

During the nine months ended September 30, 2025,50,380 shares of common stock were surrendered by certain employees of the Company to cover tax obligations in connection with the vesting of their restricted stock awards. The total value of these shares surrendered, based on the market prices on the dates the shares were surrendered, was approximately $1.5 million.

During the nine months ended September 30, 2025,9,246 shares of the Company’s stock, previously issued as stock-based compensation, were forfeited by former employees of the Company upon separation.

During the nine months ended September 30, 2025, the Company issued 171,654 shares of its common stock to executive officers, employees, and directors as stock-based compensation (see Note 6).

Dividends

In January 2025, the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $0.45 per share. The dividend was paid on April 30, 2025, to stockholders of record as of the close of business on March 28, 2025.

In April 2025, the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $0.45 per share. The dividend was paid on July 31, 2025, to stockholders of record as of the close of business on June 27, 2025.

In July 2025, the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $0.45 per share. The dividend was paid on October 31, 2025, to stockholders of record as of the close of business on September 29, 2025.

In November 2025, the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $0.45 per share. The dividend is payable on January 30, 2026, to stockholders of record as of the close of business on December 30, 2025.

Stock Repurchase Program

In May 2022, the Company’s board of directors approved a stock repurchase program to acquire up to $150.0 million of the Company’s outstanding common stock. In July 2024, the Company’s board of directors terminated the prior stock repurchase program, which was substantially depleted, and approved a new stock repurchase program to acquire up to $150.0 million of the Company’s outstanding common stock. In March 2025, the Company’s board of directors approved a $100.0 million increase to the authorization under this stock repurchase program. The stock repurchase program allows the Company to repurchase its shares from time to time in the open market in block transactions and in negotiated transactions.

During the nine months ended September 30, 2025, the Company repurchased 1,622,695 shares of its common stock for $50.2 million (including commissions and excise taxes) under the stock repurchase program.

The Company’s accounting policy upon the repurchase of shares is to deduct its par value from common stock and to reflect any excess of cost over par value as a deduction from Additional Paid-in Capital. All repurchased shares are included in the Company’s pool of authorized but unissued shares.

NOTE 6 STOCK-BASED COMPENSATION AND WARRANTS

Stock-Based Compensation

The Company maintains the Amended and Restated 2018 Equity Incentive Plan (the “2018 Plan”) for the purpose of making equity-based awards to employees, directors and other eligible persons. As of September 30, 2025, there were 2,616,959 shares available for future awards or settlement of awards under the 2018 Plan.

The Company recognizes the fair value of stock-based compensation awards expected to vest over the requisite service period as a charge against earnings, net of amounts capitalized. The Company’s stock-based compensation awards are accounted for as equity instruments and are included in the “General and administrative expenses” line item in the condensed statements of operations. The Company capitalizes a portion of stock-based compensation for employees who are directly involved in the acquisition of oil and natural gas properties into the full cost pool. Capitalized stock-based compensation is included in the “Oil and natural gas properties” line item in the condensed balance sheets.

Issuances made pursuant to the 2018 Plan are summarized as follows:

The Company issues share-based awards in the form of restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and share appreciation awards (“SARs”), subject to various vesting conditions, as compensation to executive officers, employees and directors of the Company. Typically, RSAs issued to employees and executive officers contain a service condition only and generally vest over three orfour years. Typically, RSUs and SARs contain both a service and market condition. Market conditions can be the Company’s absolute total shareholder return (“TSR”), the Company’s TSR ranking among its peer companies or the Company’s market capitalization growth measured over a defined performance period. Grantees’ continued employment through the end of the performance period is required for such RSUs and SARs to vest. RSAs issued to directors generally vest either immediately or overone year, subject to continued service and provided that any performance and/or market conditions are also met.

For awards subject to service and/or performance vesting conditions, the grant date fair value is established based on the closing price of the Company’s common stock on such date. Stock-based compensation expense for awards subject to only service conditions is recognized on a straight-line basis over the service period. Stock-based compensation expense for awards subject to both service and performance conditions are recognized on a graded basis if it is probable that the performance condition will be achieved. The Company accounts for forfeitures of awards granted under these plans as they occur in determining stock-based compensation expense.

For awards subject to a market condition, the grant date fair value is estimated using a Monte Carlo valuation model. The Company recognizes stock-based compensation expense for awards subject to market-based vesting conditions regardless of whether the market conditions are achieved or not, and stock-based compensation expense for any such awards is reversed only when the implied service requirement is not met. The Monte Carlo model is based on random projections of stock price paths and must be repeated numerous times to achieve a probabilistic assessment. Expected volatility is calculated based on the historical volatility and implied volatility of the Company’s common stock, and the risk-free interest rate is based on U.S. Treasury yield curve rates with maturities consistent with thethree-year vesting period.

Service-Based RSAs

The following table reflects the outstanding service-based RSAs and activity related thereto for the nine months ended September 30, 2025:

At September 30, 2025, there was $10.5 million of total unrecognized compensation expense related to unvested RSAs. That cost is expected to be recognized over a weighted average period of 1.08 years. For the nine months ended September 30, 2025 and 2024, the total fair value of the Company’s restricted stock awards vested was $4.5 million and $5.8 million, respectively. For the nine months ended September 30, 2025, the compensation expenses associated with these awards were $6.0 million.

Performance Equity Awards

The following table reflects the outstanding RSUs that are subject to market conditions linked to TSR (“TSR Awards”) and activity related thereto for the nine months ended September 30, 2025:

For the nine months ended September 30, 2025, the compensation expenses associated with these awards were $4.4 million. As of September 30, 2025, the unrecognized compensation expenses for these awards were $8.7 million, which will be amortized over the remaining performance period.

In December 2023, the Company also granted performance equity awards, in the form of SARs. The final payout (if any) will be a dollar amount, which may be settled in cash, shares or a combination of both at the Company’s option. The Company plans to settle the SARs that were granted in 2023 with shares. For the nine months ended September 30, 2025, the compensation expenses associated with these awards were $1.1 million. As of September 30, 2025, the unrecognized compensation expenses for these awards were $3.3 million, which will be amortized over the remaining performance period.

The Company used Monte Carlo simulation models, described above, to estimate (i) the fair value of the TSR Awards that were granted in 2023, 2024, and 2025 based on the expected outcome of the Company’s absolute TSR as well as TSR relative to the defined peer group and (ii) the fair value of the SARs that were granted in 2023 based on the expected outcome of the Company’s market capitalization appreciation rate. The Company used the following key assumptions in its Monte Carlo simulation models: (a) risk-free rates ranging from 1.7% to 4.2%, (b) dividend yield ranging fromnil to 4.3%, and (c) expected volatility ranging from 56.4% to 72.3%.

Warrants

In January 2022, as partial consideration for the purchase of certain oil and natural gas properties, the Company issued warrants to purchase 1,939,998 shares of the Company’s common stock at an exercise price equal to $28.30 per share (subject to certain anti-dilution adjustments) (the “Warrants”).

In March 2023, the Company issued 403,780 shares of common stock in exchange for the surrender and cancellation of a portion of the Warrants. Immediately prior to their cancellation, such Warrants that were surrendered were exercisable for an aggregate of approximately 824,602 shares of common stock at an exercise price of $27.4946 per share. Neither the Company nor the holders paid any cash consideration in the transaction.

In March 2024, the Company issued 656,297 shares of common stock in exchange for the surrender and cancellation of all of the remaining Warrants. Immediately prior to their cancellation, such Warrants that were surrendered were exercisable for an aggregate of approximately 1,223,963 shares of common stock at an exercise price of $26.3324 per share. Neither the Company nor the holders paid any cash consideration in the transaction.

There wereno outstanding warrants or activity related thereto for the nine months ended September 30, 2025.

NOTE 7 COMMITMENTS & CONTINGENCIES

Litigation

The Company is engaged in various proceedings incidental to the normal course of business. Due to their nature, such legal proceedings involve inherent uncertainties, including but not limited to court rulings, negotiations between affected parties and governmental intervention. Based upon the information available to the Company and discussions with legal counsel, it is the

Company’s opinion that the outcome of the various legal actions and claims that are incidental to its business will not have a material impact on the Company’s financial position, results of operations or cash flows. Such matters, however, are subject to many uncertainties, and the outcome of any matter is not predictable with assurance.

Joint Development Agreement

In December 2024, the Company entered into a Joint Development Agreement (“JDA”) with an operator to jointly develop certain natural gas and NGL properties in the Appalachian Basin. Pursuant to the JDA, the Company is required to participate in and fund a share of total development capital expenses for wells spud during calendar year 2025. As of September 30, 2025, the Company’s total remaining capital commitment for wells spud in the remainder of calendar year 2025 is expected to not exceed $32.3 million for a 15% working interest.

NOTE 8 INCOME TAXES

Income tax expense or benefits during interim periods is based on applying an estimated annual effective income tax rate to year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The provision for income taxes or benefits for the three and nine months ended September 30, 2025 and 2024 differs from the amount that would be provided by applying the statutory U.S. federal income tax rate of 21% to pre-tax income (loss) primarily due to the non-deductibility of permanent items, state income taxes, and discrete items during the three and nine months ended September 30, 2025 and 2024.

In assessing the realizability of deferred tax assets (“DTAs”), management considers whether it is more likely than not that some portion, or all, of the Company’s DTAs will not be realized. In making such determination, the Company considers all available positive and negative evidence, including (i) its earnings history, (ii) its ability to recover net operating loss carry-forwards, (iii) the projected future income and results of operations, and (iv) its ability to use tax planning strategies. If the Company concludes that it is more likely than not that some portion, or all, of its DTAs will not be realized, the tax asset is reduced by a valuation allowance. The Company assesses the appropriateness of its valuation allowance on a quarterly basis.

The One Big Beautiful Bill (“OBBB”), which was enacted in July 2025, primarily makes permanent the tax implications of the Tax Cuts and Jobs Act from 2017. The income tax provisions include the reinstatement of the 100% additional first-year “bonus” depreciation deduction, updates to the calculation of disallowed interest, and updates to the determination of whether the Company is subject to the Corporate Alternative Minimum Tax.

The Company had an income tax benefit of approximately $39.7 million and an income tax expense of $98.8 million for the three months ended September 30, 2025 and 2024, respectively. The effective tax rates for the three months ended September 30, 2025 and 2024 were 23.5% and 24.9%, respectively. The Company had an income tax expense of approximately $39.3 million and $144.4 million for the nine months ended September 30, 2025 and 2024, respectively. The effective tax rates for the nine months ended September 30, 2025 and 2024 were 26.4% and 24.3%, respectively.

NOTE 9 FAIR VALUE

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial Assets and Liabilities

As required, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2025 and December 31, 2024:

Commodity Derivatives. The Level 2 instruments presented in the tables above include commodity derivative instruments (see Note 10). The fair value of the Company’s commodity derivative instruments is determined based upon future prices, volatility and time to maturity, among other things. Counterparty statements are utilized to determine the value of the commodity derivative instruments and are reviewed and corroborated using various methodologies and significant observable inputs. The Company’s and the counterparties’ nonperformance risk is evaluated. The fair value of commodity derivative contracts is reflected in the balance sheets. The current derivative asset and liability amounts represent the fair values expected to be settled in the subsequent twelve months.

Interest Rate Derivatives. The Level 2 instruments presented in the tables above include interest rate derivative instruments (see Note 10). The fair value of the Company’s interest rate derivative instruments is determined based upon contracted notional amounts, active market-quoted interest yield curves, and time to maturity, among other things. Counterparty statements are utilized to determine the value of the interest rate derivative instruments and are reviewed and corroborated using various methodologies and significant observable inputs. The Company’s and the counterparties’ nonperformance risk is evaluated. The fair value of interest rate derivative contracts is reflected in the condensed balance sheets. The current interest rate derivative asset balances represent the fair values expected to be settled in the subsequent twelve months.

Fair Value of Other Financial Instruments

The carrying amounts of cash equivalents, receivables and payables approximate fair value due to the highly liquid or short-term nature of these instruments.

Long-term debt is not presented at fair value in the balance sheets, as it is recorded at carrying value, net of unamortized debt issuance costs and unamortized premium (see Note 4). The fair value of the Company’s Senior Notes due 2028, Convertible Notes due 2029 and Senior Notes due 2031 was $716.6 million, $711.9 million and $516.9 million, respectively, at September 30, 2025. These fair values are based on market quotes that represent Level 2 inputs.

There is no active market for the Revolving Credit Facility. The recorded value of the Revolving Credit Facility approximates its fair value because of its floating rate structure based on the SOFR spread, secured interest, and the Company’s borrowing base utilization. The fair value measurement for the Revolving Credit Facility represents Level 2 inputs.

Non-Financial Assets and Liabilities

The Company estimates asset retirement obligations pursuant to the relevant accounting standards. The initial measurement of asset retirement obligations at fair value is calculated using discounted cash flow techniques and based on internal estimates of future retirement costs associated with oil and natural gas properties. Given the unobservable nature of the inputs, including plugging costs and reserve lives, the initial measurement of the asset retirement obligations liability is deemed to use Level 3 inputs. Asset retirement obligations incurred and acquired during the nine months ended September 30, 2025 and 2024 were approximately $3.3 million and $5.3 million, respectively.

The Company issued common stock warrants in January 2022 as a part of the purchase consideration for certain oil and natural gas properties acquired by the Company. Upon issuance, the Warrants granted holders the right to purchase 1,939,998 shares of the Company’s common stock at an exercise price equal to $28.30 per share (subject to certain adjustments), generally exercisable from April 27, 2022 until January 27, 2029. A portion of the Warrants were surrendered and cancelled in March 2023, and the remaining Warrants were surrendered and cancelled in March 2024, in each case in exchange for shares of common stock (see Note 6). The fair value of the Warrants consideration was determined by utilizing an Option Pricing Model. These non-recurring fair value measurements are primarily determined using inputs that are observable or can be corroborated by observable market data (Level 2 inputs).

For all transactions accounted for as business combinations, the Company uses the acquisition method of accounting. In those instances, the Company conducts assessments of net assets acquired and recognizes amounts for identifiable assets acquired and liabilities assumed at the estimated acquisition date fair values, while transaction costs associated with the acquisitions are expensed as incurred. The Company makes various assumptions in estimating the fair values of assets acquired and liabilities assumed. The most significant assumptions relate to the estimated fair value of oil and natural gas properties. The fair value of these properties is measured using a discounted cash flow model that converts future cash flows to a single discounted amount. These assumptions represent Level 3 inputs under the fair value hierarchy.

Though the Company believes the methods used to estimate fair value are consistent with those used by other market participants, the use of other methods or assumptions could result in a different estimate of fair value. There wereno transfers of financial assets or liabilities between Level 1, Level 2 or Level 3 inputs for the nine months ended September 30, 2025.

NOTE 10 DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT

The Company utilizes various commodity price derivative instruments to (i) reduce the effects of volatility in price changes on the crude oil and natural gas commodities it produces and sells, (ii) reduce commodity price risk and (iii) provide a base level of cash flow in order to assure it can execute at least a portion of its capital spending. In addition, from time to time the Company utilizes interest rate swaps to mitigate exposure to changes in interest rates on the Company’s variable-rate indebtedness.

All derivative instruments are recorded in the Company’s condensed balance sheets as either assets or liabilities measured at their fair value (see Note 9). The Company has not designated any derivative instruments as hedges for accounting purposes and does not enter into such instruments for speculative trading purposes. If a derivative does not qualify as a hedge or is not designated as a hedge, the changes in the fair value are recognized in the Company’s condensed statements of operations as a gain or loss on derivative instruments. Mark-to-market gains and losses represent changes in fair values of derivative instruments that have not been settled. The Company’s cash flow is only impacted when the actual settlements under the derivative contracts result in making or receiving a payment to or from the counterparty. These cash settlements represent the cumulative gains and losses on the Company’s derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.

The Company has master netting agreements on individual derivative instruments with certain counterparties and therefore the current asset and liability are netted in the balance sheet and the non-current asset and liability are netted in the balance sheet for contracts with these counterparties.

The following table presents settlements on commodity derivative instruments and unsettled gains on open commodity derivative instruments for the periods presented which is recorded in the revenue section of our condensed statements of operations:

The following table summarizes open commodity derivative positions as of September 30, 2025, for commodity derivatives that were entered into through September 30, 2025, for the settlement periods presented:

(1)Swaptions are crude oil and natural gas derivative contracts that give counterparties the option to extend certain derivative contracts for additional periods. Call Options are crude oil and natural gas derivative contracts sold by the Company that give counterparties the option to exercise certain derivative contracts. The volumes and prices reflected as Swaptions and Call Options in this table will only be effective if the options are exercised by the applicable counterparties.

Interest Rate Derivative Instruments

At times, the Company uses interest rate swaps to effectively convert a portion of its variable rate indebtedness to fixed rate indebtedness. The settlement of derivative instruments is recognized as a component of interest expense in the statements of operations. The mark-to-market component of these derivative instruments is recognized in loss on unsettled interest rate derivatives, net in the statements of operations. The following table summarizes our open interest rate derivative contracts as of September 30, 2025.

Other Information Regarding Derivative Instruments

The following table sets forth the amounts, on a gross basis, and classification of the Company’s outstanding derivative financial instruments at September 30, 2025 and December 31, 2024, respectively. Certain amounts may be presented on a net basis in the condensed financial statements when such amounts are with the same counterparty and subject to a master netting arrangement.

The use of derivative transactions involves the risk that the counterparties will be unable to meet the financial terms of such transactions. When the Company has netting arrangements with its counterparties that provide for offsetting payables against receivables from separate derivative instruments these assets and liabilities are netted in the balance sheet. The tables presented below provide a reconciliation between the gross assets and liabilities and the amounts reflected in the balance sheets. The amounts presented exclude derivative settlement receivables and payables as of the balance sheet dates.

All of the Company’s outstanding derivative instruments are covered by International Swap Dealers Association Master Agreements (“ISDAs”) entered into with parties that are also lenders under the Company’s Revolving Credit Facility. The Company’s obligations under the derivative instruments are secured pursuant to the Revolving Credit Facility, and no additional collateral had been posted by the Company as of September 30, 2025. The ISDAs may provide that as a result of certain circumstances, such as cross-defaults, a counterparty may require all outstanding derivative instruments under an ISDA to be settled immediately. See Note 9 for the aggregate fair value of all derivative instruments at September 30, 2025 and December 31, 2024.