Chord Energy Corp

6. Derivative Instruments

Commodity derivative contracts. The Company utilizes derivative financial instruments to manage risks related to changes in commodity prices. The Company’s crude oil contracts settle monthly based on the average NYMEX WTI, while crude oil basis swaps settle monthly based on the average fixed differential between NYMEX WTI and the ICE BRENT index price. Natural gas contracts settle monthly based on the average NYMEX Henry Hub natural gas index price.

The Company utilizes derivative financial instruments including fixed-price swaps, two-way and three-way collars, and basis swaps to manage risks related to changes in commodity prices. The Company’s fixed-price swaps are designed to establish a fixed price for the volumes under contract. Two-way collars are designed to establish a minimum price (floor) and a maximum price (ceiling) for the volumes under contract. Three-way collars are designed to establish a minimum price (floor), unless the market price falls below the sold put (sub-floor), at which point the minimum price would be the index price plus the difference between the purchased put and the sold put strike price. The sold call establishes a maximum price (ceiling) for the volumes under contract. A basis swap transaction has an established fixed basis differential corresponding to two floating index prices. Depending on the difference of the two floating index prices in relation to the fixed basis differential, the Company either receives an amount from its counterparty, or pays an amount to its counterparty, equal to the difference multiplied by the volumes under contract. The Company may, from time to time, restructure existing derivative contracts or enter into new transactions to effectively modify the terms of current contracts in order to improve the pricing parameters in existing contracts.

At June 30, 2026, the Company had the following outstanding commodity derivative contracts:

At June 30, 2026, the Company had the following outstanding crude oil basis swaps:

(1)The weighted average differential represents the average fixed differential to NYMEX WTI as stated in the related contracts, which is compared to the ICE BRENT index price. If NYMEX WTI combined with the fixed differential as stated in each contract is lower than the ICE BRENT index price at any settlement date, the Company receives the difference. Conversely, if NYMEX WTI combined with the fixed differential as stated in each contract is higher than the ICE BRENT index price, the Company pays the difference.

Subsequent to June 30, 2026 through August 3, 2026, the Company entered into the following commodity derivative contracts:

Contingent consideration. In connection with the Company’s 2021 divestiture of certain oil and gas properties, the Company was entitled to receive up tothree earn-out payments of $25.0 million per year for each of 2023, 2024 and 2025 if the average daily settlement price of NYMEX WTI exceeded $60 per barrel for such year (the “Contingent Consideration”). In each of January 2024, 2025 and 2026, the Company received $25.0 million related to the 2023, 2024 and 2025 earn-out payments, respectively. There are no earn-out payments remaining as of June 30, 2026.

The following table summarizes the location and amounts of gains and losses from the Company’s derivative instruments recorded in the Company’s Condensed Consolidated Statements of Operations for the periods presented:

In accordance with the FASB’s authoritative guidance on disclosures about offsetting assets and liabilities, the Company is required to disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position as well as instruments and transactions subject to an agreement similar to a master netting agreement. The Company’s derivative instruments are presented as assets and liabilities on a net basis by counterparty, as all counterparty contracts provide for net settlement. No margin or collateral balances are deposited with counterparties, and as such, gross amounts are offset to determine the net amounts presented in the Company’s Condensed Consolidated Balance Sheets.

The following table summarizes the location and fair value of all outstanding derivative instruments recorded in the Company’s Condensed Consolidated Balance Sheets: