Vitesse Energy, Inc.
For the period ended Mar 31, 2025. Filed May 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 5, 2025
VTS$14.78-1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-04.
0001944558-24-000107
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-05.
0001944558-25-000059
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 97 current paragraphs.
37 unchanged; 49 reworded; 11 added; 17 removed; 13 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
■Closed an all-stock acquisition of Lucero Energy Corp. for total consideration of $194.3 million.
Current report
■Total revenue of $66.2 million.
Current report
■Net income of $2.7 million.
Current report
■Cash flows from operations of $17.5 million.
Current report
■Total debt of $117.0 million at March 31, 2025.
Current report
Lease Operating Expense. Lease operating expense increased to $13.9 million for the three months ended March 31, 2025 from $11.8 million for the three months ended March 31, 2024 as a result of a 18% increase in production volumes between periods.
Current report
Income Tax Expense.
Current report
Business Combinations
Current report
We account for business combinations using the acquisition method of accounting. Under this method, we recognize the identifiable assets acquired and liabilities assumed at their estimated acquisition-date fair values. Transaction and integration costs related to business combinations are expensed as incurred.
Current report
In valuing the assets acquired and liabilities assumed, we make various assumptions to estimate fair values. Fair value is a market-based measurement that reflects the assumptions market participants would use in pricing an asset or liability. For the Lucero Acquisition, the most significant assumptions related to the estimated fair value of the proved oil and gas properties. The fair value of these properties was determined using the income approach, which is based on discounted future net cash flows derived from the properties' reserve reports. The valuation relied primarily on unobservable inputs, which are classified as Level 3 within the fair value hierarchy under ASC 820. Key inputs included estimates of future production volumes from the proved reserves, future commodity prices based on forward strip price curves (adjusted for basis differentials), estimates of lease operating, development and abandonment costs, and the application of a discount rate.
Current report
Any excess of the acquisition price over the estimated fair value of net assets acquired is recorded as goodwill and is subject to ongoing impairment evaluation as described. Any excess of the estimated fair value of net assets acquired over the acquisition price is recorded in current earnings as a gain on bargain purchase. Deferred taxes are recorded for any differences between the assigned values and the tax basis of assets and liabilities. Estimated deferred taxes are based on available information concerning the tax basis of assets acquired and liabilities assumed and loss carryforwards at the acquisition date, although such estimates may change in the future as additional information becomes known.
Removed paragraphs (17)
Previous report
■Total revenue of $58.3 million.
Previous report
■Net income of $17.4 million.
Previous report
■Cash flows from operations of $45.7 million.
Previous report
■Total debt of $105.0 million at September 30, 2024.
Previous report
NYMEX natural gas price was $2.11 per MMBtu, or 18% lower than the 2023 average year-to-date price per MMBtu. During the nine months ended September 30, 2024 and 2023, we had no natural gas price derivatives in place and our realized natural gas price was $1.29 per Mcf and $1.99 per Mcf, respectively.
Previous report
Lease Operating Expense. Lease operating expense decreased to $9.71 per Boe for the three months ended September 30, 2024 from $9.86 per Boe for the three months ended September 30, 2023. The decrease per Boe for the three months ended September 30, 2024 compared with the three months ended September 30, 2023 was due to reduced workover costs and the blend of production during the three months ended September 30, 2024 with a higher percentage of production in the quarter from newer vintage wells with lower cost structures.
Previous report
Results of Operations
Previous report
Nine Months Ended September 30, 2024 Compared with Nine Months Ended September 30, 2023
Previous report
Lease Operating Expense. Lease operating expense increased to $10.00 per Boe for the nine months ended September 30, 2024 from $9.20 per Boe for the nine months ended September 30, 2023. The increase per Boe for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023 was related to higher service costs throughout the nine months ended September 30, 2024, due to higher operating costs associated with inclement weather in January 2024 and the blend of production with a higher percentage of production from older vintage wells with higher cost structures.
Previous report
General and Administrative Expense. General and administrative expense decreased to $15.3 million for the nine months ended September 30, 2024 from $19.1 million for the nine months ended September 30, 2023. General and administrative expense on a per Boe basis decreased to $4.30 for the nine months ended September 30, 2024 from $6.21 for the nine months ended September 30, 2023. The decrease in general and administrative expense was primarily due to costs in the first half of 2023 related to the Spin-Off of $6.8 million. Excluding costs related to the Spin-Off the per Boe rate for the nine months ended September 30, 2023 would have been $4.00. The increase in per BOE cost is associated with increased legal and employee related cost.
Previous report
DD&A. DD&A increased to $73.8 million for the nine months ended September 30, 2024 compared with $56.2 million for the nine months ended September 30, 2023. The increase was the result of a 15% increase in production and a $2.44 per Boe increase in the DD&A rate for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023. The higher DD&A rate was driven by changes to reserves and higher acquisition and development costs in 2024. The increase in production accounted for a $10.0 million increase in DD&A expense while the increase in the DD&A rate accounted for a $7.5 million increase in DD&A expense.
Previous report
Equity-Based Compensation. During the nine months ended September 30, 2024, equity-based compensation expense decreased to $5.9 million from $30.5 million during the nine months ended September 30, 2023. Equity-based compensation expense was primarily higher in 2023 due to retirement vesting provisions in some of the awards resulting in 1,863,000 restricted stock units being expensed upon award. The retirement vesting provisions were responsible for $26.8 million of expense during the nine months ended September 30, 2023.
Previous report
Interest Expense. Interest expense increased to $7.5 million for the nine months ended September 30, 2024 from $3.5 million for the nine months ended September 30, 2023. The increase for the nine months ended September 30, 2024 was primarily due to the debt balance increasing to $105.0 million at September 30, 2024 from $56.0 million at September 30, 2023.
Previous report
Income Tax Expense. During the nine months ended September 30, 2024, we recorded an income tax expense of $9.2 million related to federal and state income taxes.
Previous report
During the nine months ended September 30, 2023, the Predecessor was contributed into Vitesse resulting in a change in tax status and the recording of a $44.1 million deferred tax liability related to the temporary difference between the tax and GAAP basis of the assets of the Predecessor and an offsetting charge to income tax expense. Additionally, we recorded an income tax expense of $2.3 million for the nine months ended September 30, 2023 related to federal and state income taxes.
Previous report
The provision for income taxes for the nine months ended September 30, 2023 differs from the amount that would be provided by applying the U.S. federal statutory rate of 21% to pre-tax book loss primarily due to (i) deferred tax expense reflected as a discrete item related to the change in tax status of Vitesse Energy from a partnership to a corporation as part of the Spin-Off, (ii) §162(m) limitations on certain covered employee compensation, and (iii) state income taxes.
Previous report
We prepare our financial statements and the accompanying notes in conformity with accounting principles generally accepted in the United States, which require management to make estimates and assumptions about future events that affect the reported amounts in the financial statements and the accompanying notes. We identify certain accounting policies and estimates as critical based on, among other things, their impact on our financial condition, results of operations, and the degree of difficulty, subjectivity and complexity in their application. Critical accounting policies and estimates cover accounting matters that are inherently uncertain because the future resolution of such matters is unknown. Management routinely discusses the development, selection and disclosure of each of the critical accounting policies and estimates.
Reworded paragraphs (49)
Previous wording
As further described in Note 1 (“Nature of Business”) to the Condensed Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q, we completed the Spin-Off on January 13, 2023. The financial information presented herein is (i) for periods prior to January 13, 2023, that of our Predecessor, and (ii) for periods after January 13, 2023, that of Vitesse Energy, Inc. and its subsidiaries.
Current wording
As further described in Note 3 (“Oil and Gas Properties”) to the Condensed Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q, we completed the Lucero Acquisition on March 7, 2025. The financial information presented herein (i) excludes the results of Lucero and its subsidiaries for periods prior to March 7, 2025 and (ii) includes the results Lucero and its subsidiaries for periods on or after March 7, 2025.
Previous wording
Our business strategy is focused on creating long-term stockholder value through the profitable acquisition, development and production of oil and natural gas assets that provide an attractive return on invested capital, while maintaining a strong balance sheet and distributing a meaningful dividend to our stockholders. We invest in non-operated minority working and mineral interests in oil and natural gas properties with our core area of focus currently in the Bakken and Three Forks formations of the Williston Basin of North Dakota and Montana. We also have interests in wells in the Denver-Julesburg Basin located in Colorado and Wyoming and the Powder River Basin located in Wyoming. As of September 30, 2024, we had a working interest in 5,959 gross (163.7 net) productive wells and 255 gross (11.3 net) wells that were being drilled or completed, and an additional 357 gross (8.8 net) wells that had been permitted for development by our operators. In addition, we had a royalty only interest in 1,167 gross (2.8 net) productive wells.
Current wording
Our business strategy is focused on creating long-term stockholder value through the profitable acquisition, development and production of oil and natural gas assets that provide an attractive return on invested capital, while maintaining a strong balance sheet and distributing a meaningful dividend to our stockholders. We invest in working and mineral interests in oil and natural gas properties with our core area of focus currently in the Bakken and Three Forks formations of the Williston Basin of North Dakota and Montana. We also have interests in wells in the Denver-Julesburg Basin located in Colorado and Wyoming and the Powder River Basin located in Wyoming. As of March 31, 2025, we had a working interest in 6,186 gross (221.5 net) productive wells and 246 gross (9.5 net) wells that were being drilled or completed, and an additional 377 gross (15.5 net) wells that had been permitted for development by our operators. In addition, we had a royalty only interest in 1,211 gross (3.0 net) productive wells.
Previous wording
■Paid quarterly dividend of $0.525 per share to our common stockholders.
Current wording
■Paid quarterly dividend of $0.5625 per share to our common stockholders.
Previous wording
■Production of 13,009 BOE/day with 68% of production from oil.
Current wording
■Production of 14,971 Boe/d with 68% of production from oil.
Previous wording
■Invested $17.2 million in capital development and acquisitions.
Current wording
■Invested $30.4 million in capital development and acquisitions.
Previous wording
Commodity prices are a significant factor impacting our earnings, operating cash flows and our acquisition and divestiture strategy, as well as the decisions of our operators in conducting their operations. During the last several years, prices for oil and natural gas have experienced periodic downturns and sustained volatility, impacted by the COVID-19 pandemic and recovery, Russia’s invasion of Ukraine and the related sanctions imposed on Russia, Hamas’ attack against Israel and the ensuing conflict and escalation of tensions in the Middle East (including with Iran), supply chain constraints and elevated interest rates and costs of capital. In response to such events over the last couple of years, OPEC and its key member, Saudi Arabia, announced several mandatory and voluntary reductions in production that continue to remain in place and are aimed at supporting the stability of the oil market.
Current wording
Commodity prices are a significant factor impacting our earnings, operating cash flows and our acquisition and divestiture strategy, as well as the decisions of us and our operators in conducting operations. During the last several years, prices for oil and natural gas have experienced periodic downturns and sustained volatility, impacted by the COVID-19 pandemic and recovery, the ongoing military conflict between Russia and Ukraine, conflict in the Middle East, supply chain constraints, elevated interest rates and costs of capital, and changes in production by OPEC and its key member, Saudi Arabia, and certain other non-OPEC oil-producing countries.
Previous wording
As a result of such commodity price volatility, which we expect to continue throughout 2024, our earnings and operating cash flows can vary substantially. While we do hedge a substantial portion of our production, we are still significantly subject to movements in commodity prices. Such volatility can make it difficult to predict future effects on our financial results and the decisions of our operators. Factors that we expect will continue to impact commodity prices include product demand connected with global economic conditions, inflationary factors, industry production and inventory levels, the United States Department of Energy’s future planned repurchases (or additional possible releases) of oil from the strategic petroleum reserve, technology advancements, production quotas or other actions imposed by OPEC and other countries, actions of regulators, and regional supply interruptions or fears thereof that may be caused by military conflicts (including invasion), civil unrest, pandemic or political uncertainty. Any of the foregoing can have a substantial impact on the prices of oil and natural gas, which in turn impacts the decision of our operators to drill and extract resources. Despite such commodity price volatility, we expect that our cash flow from operations and borrowing availability under our Revolving Credit Facility will allow us to meet our liquidity needs for the next twelve months.
Current wording
As a result of such commodity price volatility, which we expect to continue throughout 2025, our earnings and operating cash flows can vary substantially. While we do hedge a substantial portion of our production, we are still significantly subject to movements in commodity prices. Such volatility can make it difficult to predict future effects on our financial results and the decisions of our operators. Factors that we expect will continue to impact commodity prices include product demand connected with global economic conditions, inflationary factors, industry production and inventory levels, the United States Department of Energy’s planned repurchases (or possible releases) of oil from the strategic petroleum reserve, technology advancements, production quotas or other actions imposed by OPEC and other oil-producing countries, the imposition of tariffs and other controls on imports and exports and resulting consequences of such, actions of regulators, and regional supply interruptions or fears thereof that may be caused by military conflicts, civil unrest or political uncertainty. Any of the foregoing can have a substantial impact on the prices of oil and natural gas, which in turn impacts our decisions and the decision of our operators to drill and extract resources.
Previous wording
We derive our revenues from the sale of oil and natural gas produced from our properties. Revenues are a function of the volume produced, the prevailing market price at the time of sale, oil quality, Btu content and transportation costs to market. We use derivative instruments to hedge future sales prices on a substantial, but varying, portion of our oil production. We have not hedged natural gas production since March 2022 due to the mismatch between our operators’ pricing formulas and settlement mechanics on natural gas hedges. We expect our derivative activities will help us achieve more predictable cash flows and reduce our exposure to downward price fluctuations. The use of derivative instruments has in the past, and may in the future, prevent us from realizing the full benefit of upward price movements but also mitigates the effects of declining price movements.
Current wording
We derive our revenues from the sale of oil and natural gas produced from our properties. Revenues are a function of the volume produced, the prevailing market price at the time of sale, oil quality, Btu content and transportation costs to market. We use derivative instruments to hedge future sales prices on a substantial, but varying, portion of our oil and natural gas production. We expect our derivative activities will help us achieve more predictable cash flows and reduce our exposure to downward price fluctuations. The use of derivative instruments has in the past, and may in the future, prevent us from realizing the full benefit of upward price movements but also mitigates the effects of declining price movements.
Previous wording
Depletion, depreciation, amortization, and accretion. Depletion, depreciation, amortization, and accretion (“DD&A”) includes the systematic expensing of the capitalized costs incurred to acquire, explore and develop oil and natural gas properties. As a successful efforts company, costs associated with the acquisition, drilling, and equipping of successful exploratory wells and costs of successful and unsuccessful development wells are capitalized. Accretion expense relates to the passage of time of our asset retirement obligations.
Current wording
DD&A. DD&A includes the systematic expensing of the capitalized costs incurred to acquire, explore and develop oil and natural gas properties. As a successful efforts company, costs associated with the acquisition, drilling, and equipping of successful exploratory wells and costs of successful and unsuccessful development wells are capitalized. Accretion expense relates to the passage of time of our asset retirement obligations.
Previous wording
General and administrative expenses. General and administrative expenses include overhead, including payroll and benefits for our corporate staff, costs of maintaining our headquarters, costs of managing our acquisition and development operations, franchise taxes, audit and other professional fees and legal compliance.
Current wording
General and administrative expenses. General and administrative expenses include overhead, including payroll and benefits for our staff, costs of maintaining our headquarters, costs of managing our acquisition and development operations, franchise taxes, audit and other professional fees and legal compliance. During the three months ended March 31, 2025, general and administrative expenses included non-recurring costs related to the Lucero Acquisition.
Previous wording
Interest expense. We finance a portion of our working capital requirements, capital expenditures and acquisitions with borrowings under our Revolving Credit Facility and prior to the Spin-Off, under the Prior Revolving Credit Facility. As a result, we incur interest expense that is affected by both fluctuations in interest rates and our financing decisions. We do not capitalize any portion of the interest paid on applicable borrowings. We include the amortization of deferred financing costs, commitment fees and annual agency fees as interest expense.
Current wording
Interest expense. We finance a portion of our working capital requirements, capital expenditures and acquisitions with borrowings under our Revolving Credit Facility. As a result, we incur interest expense that is affected by both fluctuations in interest rates and our financing decisions. We do not capitalize any portion of the interest paid on applicable borrowings. We include the amortization of deferred financing costs, commitment fees and annual agency fees as interest expense.
Previous wording
Impairment expense. Under the successful efforts method of accounting, we review our oil and natural gas properties for impairment whenever events and circumstances indicate that a decline in the recoverability of their carrying value may have occurred. Whenever we conclude the carrying value may not be recoverable, we estimate the expected undiscounted future net cash flows of our oil and natural gas properties using proved and risked probable and possible reserves based on our development plans and best estimate of future production, commodity pricing, reserve risking, gathering, processing and transportation deductions, production tax rates, lease operating expenses and future development costs. We compare such undiscounted future net cash flows to the carrying amount of the oil and natural gas properties in each depletion pool to determine if the carrying amount is recoverable. If the undiscounted future net cash flows exceed the carrying amount of the aggregated oil and natural gas properties, no impairment is recorded. If the carrying amount of the oil and natural gas properties exceeds the undiscounted future net cash flows, we will record an impairment expense to reduce the carrying value to fair value as of the balance sheet date. The factors used to determine fair value may include, but are not limited to, recent sales prices of comparable properties, indications from marketing activities, the present value of future revenues, net of estimated operating and development costs using estimates of reserves, future commodity pricing, future production estimates, anticipated capital expenditures and various discount rates commensurate with the risk and current market conditions associated with realizing the projected cash flows. The Company has not incurred impairment expense during the periods presented.
Current wording
Impairment expense. Under the successful efforts method of accounting, we review our oil and natural gas properties for impairment whenever events and circumstances indicate that a decline in the recoverability of their carrying value may have occurred. Whenever we conclude the carrying value may not be recoverable, we estimate the expected undiscounted future net cash flows of our oil and natural gas properties using proved and risked probable and possible reserves based on our development plans and best estimate of future production, commodity pricing, reserve risking, gathering, processing and transportation deductions, production tax rates, lease operating expenses and future development costs. We compare such undiscounted future net cash flows to the carrying amount of the oil and natural gas properties in each depletion pool to determine if the carrying amount is recoverable. If the undiscounted future net cash flows exceed the carrying amount of the aggregated oil and natural gas properties, no impairment is recorded. If the carrying amount of the oil and natural gas properties exceeds the undiscounted future net cash flows, we will record an impairment expense to reduce the carrying value to fair value as of the balance sheet date. The factors used to determine fair value may include, but are not limited to, recent sales prices of comparable properties, indications from marketing activities, the present value of future revenues, net of estimated operating and development costs using estimates of reserves, future commodity pricing, future production estimates, anticipated capital expenditures and various discount rates commensurate with the risk and current market conditions associated with realizing the projected cash flows. There were no proved oil and gas property impairments during the three months ended March 31, 2025 and 2024.
Previous wording
■the timing and success of drilling and production activities by our operating partners;
Current wording
■the timing and success of our drilling and production activities and those of our operating partners;
Previous wording
The price that we receive for the oil and natural gas we produce is largely a function of market supply and demand. Because our oil and gas revenues are heavily weighted toward oil, we are more significantly impacted by changes in oil prices than by changes in the price of natural gas. World-wide supply in terms of output, especially production from properties within the United States, the production quota set by OPEC, the conflicts in Ukraine and in the Middle East and the strength of the U.S. dollar can adversely impact oil prices.
Current wording
The price that we receive for the oil and natural gas we produce is largely a function of market supply and demand. Because our oil and gas revenues are heavily weighted toward oil, we are more significantly impacted by changes in oil prices than by changes in the price of natural gas. Worldwide supply in terms of output, especially production from properties within the United States, the production quotas set by OPEC and certain other oil-producing countries, the conflicts in Ukraine and in the Middle East and the strength of the U.S. dollar can adversely impact oil prices.
Previous wording
Historically, commodity prices have been volatile and we expect the volatility to continue in the future. The future oil prices will be impacted by varying oil supply and demand both regionally and world-wide.
Current wording
Historically, commodity prices have been volatile and we expect the volatility to continue in the future. Future oil prices will be impacted by varying oil supply and demand both regionally and worldwide.
Previous wording
The average third quarter 2024 oil price was $75.26 per barrel or 8% lower than the average oil price per barrel in the third quarter of 2023. Our settled derivatives increased our realized oil price per barrel by $1.77 in the third quarter of 2024 and decreased our realized oil price per barrel by $2.10 during the third quarter of 2023. Our average third quarter 2024 realized oil price per barrel after reflecting settled derivatives was $71.20 compared to $76.35 during the same period in 2023. The average third quarter 2024 NYMEX natural gas price was $2.11 per MMBtu, or 21% lower than the average NYMEX price per MMBtu in the third quarter of 2023. In the third quarter 2024 and 2023, we had no natural gas price derivatives in place and our realized natural gas price was $0.90 per Mcf and $0.88 per Mcf, respectively.
Current wording
The average first quarter 2025 NYMEX oil price was $71.34 per barrel or 7% lower than the average NYMEX oil price per barrel in the first quarter of 2024. Our settled derivatives increased our realized oil price per barrel by $0.75 and $1.03 in the first quarter of 2025 and 2024, respectively. Our average first quarter 2025 realized oil price per barrel after reflecting settled derivatives was $64.93 compared to $71.65 during the same period in 2024. The average first quarter 2025 NYMEX natural gas price was $4.14 per MMBtu, or 93% higher than the average NYMEX price per MMBtu in the first quarter of 2024. In the first quarter of 2025 and 2024, we had no realized natural gas derivative settlements and our realized natural gas price was $2.81 per Mcf and $1.93 per Mcf, respectively.
Previous wording
Oil and Natural Gas Revenue and Volumes. Oil and natural gas revenue increased to $58.3 million for the three months ended September 30, 2024 from $55.1 million for the three months ended September 30, 2023. The increase in oil and natural gas revenue was due to a 18% increase in production volumes, driven by acquisition and development activity, partially offset by a 10% decrease in the average realized prices per Boe before hedging for the three months ended September 30, 2024. The increase in production volumes and decrease in average realized prices per Boe before hedging increased and decreased oil and natural gas revenue by approximately $9.0 million and $5.7 million, respectively.
Current wording
Oil and Natural Gas Revenue and Volumes. Oil and natural gas revenue increased to $66.2 million for the three months ended March 31, 2025 from $61.2 million for the three months ended March 31, 2024. The increase in oil and natural gas revenue was due to a 18% increase in production volumes, driven by acquisition and development activity (including the Lucero Acquisition), which was partially offset by a 8% decrease in the average realized prices per Boe before hedging for the three months ended March 31, 2025. The increase in production volumes increased oil and natural gas revenue by approximately $10.1 million, while the decrease in average realized prices per Boe before hedging decreased oil and natural gas revenue by approximately $5.1 million.
Previous wording
Our oil price differential to the weighted average benchmark price during the three months ended September 30, 2024 was negative $5.80 per barrel, as compared to a negative $4.30 per barrel during the three months ended September 30, 2023, primarily due to less favorable local market pricing as compared to the benchmark price due to regional supply and demand imbalances. Our net realized natural gas price during the three months ended September 30, 2024 was $0.90 per Mcf, representing a 43% realization relative to the weighted average NYMEX natural gas price, compared to a net realized natural gas price of $0.88 per Mcf during the three months ended September 30, 2023, representing a 34% realization relative to weighted average NYMEX natural gas price. Fluctuations in our natural gas price differentials and realizations are due to several factors such as NGL value net of processing costs, gathering and transportation fees, takeaway capacity relative to production levels, regional storage capacity, and seasonal refinery maintenance temporarily depressing demand. The exact impact of each of these items is difficult to quantify as each of our operators pass through these costs in a different manner.
Current wording
Our oil price differential to the weighted average benchmark price during the three months ended March 31, 2025 was negative $6.72 per barrel, as compared to a negative $6.47 per barrel during the three months ended March 31, 2024, primarily due to less favorable local market pricing as compared to the benchmark price. Our net realized natural gas price during the three months ended March 31, 2025 was $2.81 per Mcf, representing a 68% realization relative to the weighted average NYMEX natural gas price, compared to a net realized natural gas price of $1.93 per Mcf during the three months ended March 31, 2024, representing a 98% realization relative to weighted average NYMEX natural gas price. Fluctuations in our natural gas price differentials and realizations are due to several factors such as NGL value net of processing costs, gathering and transportation fees, takeaway capacity relative to production levels, regional storage capacity, and seasonal refinery maintenance temporarily depressing demand. The exact impact of each of these items is difficult to quantify as each of our operators pass through these costs in a different manner.
Previous wording
Production Tax Expense. Total production taxes increased to $5.3 million for the three months ended September 30, 2024 from $5.2 million for the three months ended September 30, 2023. Production taxes are primarily based on oil revenue and natural gas production, excluding gains and losses associated with hedging activities. Production taxes as a percentage of oil and natural gas sales before hedging adjustments were 9.1% and 9.4% for the three months ended September 30, 2024 and 2023, respectively. The decrease in the production tax rate for the three months ended September 30, 2024 was due to a higher percentage of revenue coming from gas, which is generally taxed at a lower rate than oil.
Current wording
Production Tax Expense. Total production taxes was $5.8 million for the three months ended March 31, 2025 and 2024. Production taxes are primarily based on oil revenue and natural gas production, excluding gains and losses associated with hedging activities. Production taxes as a percentage of oil and natural gas sales before hedging adjustments were 8.7% and 9.5% for the three months ended March 31, 2025 and 2024, respectively. The decrease in the production tax rate for the three months ended March 31, 2025 was due to a lower ratio of oil revenue to total revenue, since oil revenue is typically taxed at a higher rate than gas revenue.
Previous wording
General and Administrative Expense. General and administrative expense increased to $5.2 million for the three months ended September 30, 2024 from $3.8 million for the three months ended September 30, 2023. General and administrative expense on a per Boe basis increased to $4.37 for the three months ended September 30, 2024 from $3.77 for the three months ended September 30, 2023. The increase in total general and administrative expense was due to increased legal and employee related costs.
Current wording
General and Administrative Expense. General and administrative expense increased to $12.1 million for the three months ended March 31, 2025 from $5.4 million for the three months ended March 31, 2024. General and administrative expense on a per Boe basis increased to $9.00 for the three months ended March 31, 2025 from $4.70 for the three months ended March 31, 2024. The increase in general and administrative expense was primarily due to Lucero Acquisition transaction costs of $4.6 million. Excluding these costs the per Boe rate for the three months ended March 31, 2025 would have been $5.57.
Previous wording
DD&A. DD&A increased to $24.9 million for the three months ended September 30, 2024 compared with $19.0 million for the three months ended September 30, 2023. The increase was the result of a 18% increase in production and a $2.05 per Boe increase in the DD&A rate for the three months ended September 30, 2024 compared with the three months ended September 30, 2023. The higher DD&A rate was driven by changes to reserves and higher acquisition and development costs in 2024. The increase in production accounted for a $3.8 million increase in DD&A expense while the increase in the DD&A rate accounted for a $2.1 million increase in DD&A expense.
Current wording
DD&A. DD&A increased to $26.6 million for the three months ended March 31, 2025 compared with $23.5 million for the three months ended March 31, 2024. The increase of $3.0 million, or 13%, was the result of an 18% increase in production partially offset by a $0.89 per Boe decrease in the DD&A rate for the three months ended March 31, 2025 compared with the three months ended March 31, 2024. The lower DD&A rate was driven by the properties acquired in the Lucero Acquisition in 2025. The increase in production accounted for a $4.0 million increase in DD&A expense while the decrease in the DD&A rate accounted for a $1.0 million decrease in DD&A expense.
Previous wording
For the three months ended September 30, 2024, the relationship of capital expenditures, proved reserves and production from certain producing fields yielded a depletion rate (excluding depreciation, amortization and accretion) of $20.67 per Boe compared with $18.61 per Boe for the three months ended September 30, 2023.
Current wording
For the three months ended March 31, 2025, the relationship of capital expenditures, proved reserves and production from certain producing fields yielded a depletion rate (excluding depreciation, amortization and accretion) of $19.56 per Boe compared with $20.44 per Boe for the three months ended March 31, 2024.
Previous wording
Equity-Based Compensation. During the three months ended September 30, 2024, equity-based compensation expense increased to $2.2 million from $1.1 million during the three months ended September 30, 2023. Equity-based compensation expense was primarily higher in 2024 due to additional LTIP RSUs and PSUs awarded to employees and directors in 2024 at a higher grant date price.
Current wording
Equity-Based Compensation. During the three months ended March 31, 2025, equity-based compensation expense increased to $2.5 million from $1.6 million during the three months ended March 31, 2024. Equity-based compensation expense was higher in 2025 due to additional LTIP RSUs and PSUs awarded to employees and directors in 2024 and 2025 at higher grant date prices.
Previous wording
Interest Expense. Interest expense increased to $2.7 million for the three months ended September 30, 2024 from $1.2 million for the three months ended September 30, 2023. The increase for the three months ended September 30, 2024 was primarily due to the debt balance increasing to $105.0 million from $56.0 million at September 30, 2023.
Current wording
Interest Expense. Interest expense increased to $2.9 million for the three months ended March 31, 2025 from $2.2 million for the three months ended March 31, 2024. The increase for the three months ended March 31, 2025 was primarily due to the debt balance increasing to $117.0 million from $98.0 million at March 31, 2024.
Previous wording
Commodity Derivative Gain (Loss), Net. The commodity derivative gain was $17.4 million for the three months ended September 30, 2024 compared with a loss of $17.1 million for the three months ended September 30, 2023. Gain (Loss) on Commodity Derivatives is comprised of (1) cash gains and losses we recognize on settled commodity derivative instruments during the period, and (2) unsettled gains and losses we incur on commodity derivative instruments outstanding at period-end.
Current wording
Commodity Derivative (Loss), Net. The net commodity derivative loss was $0.2 million for the three months ended March 31, 2025 compared with a loss of $13.8 million for the three months ended March 31, 2024. (Loss) Gain on Commodity Derivatives is comprised of (1) cash gains and losses we recognize on settled commodity derivative instruments during the period, and (2) unsettled gains and losses we incur on commodity derivative instruments outstanding at period-end.
Previous wording
The mark-to-market fair value of the unsettled commodity derivative instruments will generally be inversely related to the price movement of the underlying commodity. If commodity price trends reverse from period to period, prior unrealized gains may become unrealized losses and vice versa. These unrealized gains and losses will impact our net income in the period reported. The mark-to-market fair value can create non-cash volatility in our reported earnings during periods of commodity price volatility. We have experienced such volatility in the past and are likely to experience it in the future. Gains on our derivatives generally indicate lower oil revenues in the future while losses indicate higher future oil revenues. Oil prices declined during the nine months ended September 30, 2024 as compared to an oil price increase during the nine months ended September 30, 2023.
Current wording
The mark-to-market fair value of the unsettled commodity derivative instruments will generally be inversely related to the price movement of the underlying commodity. If commodity price trends reverse from period to period, prior unrealized gains may become unrealized losses and vice versa. These unrealized gains and losses will impact our net income in the period reported. The mark-to-market fair value can create non-cash volatility in our reported earnings during periods of commodity price volatility. We have experienced such volatility in the past and are likely to experience it in the future. Gains on our derivatives generally indicate lower oil revenues in the future while losses indicate higher future oil revenues. Oil prices were relatively flat during the three months ended March 31, 2025 as compared to oil price increases during the three months ended March 31, 2024.
Previous wording
(1)Realized and unrealized gains and losses on commodity derivatives are presented herein as separate line items but are combined for a total commodity derivative gain (loss) in the statements of operations included in this Form 10-Q. Management believes the separate presentation of the realized and unrealized commodity derivative gains and losses is useful because the realized cash settlement portion provides a better understanding of our hedge position.
Current wording
(1)Realized and unrealized gains and losses on commodity derivatives are presented herein as separate line items but are combined for a total Commodity derivative (loss), net in the statements of operations included in this Form 10-Q. Management believes the separate presentation of the realized and unrealized commodity derivative gains and losses is useful because the realized cash settlement portion provides a better understanding of our hedge position.
Previous wording
In the three months ended September 30, 2024, approximately 63% of our oil volumes and none of our natural gas volumes were covered by financial hedges, which resulted in a realized gain on oil derivatives of $1.4 million. In the three months ended September 30, 2023, approximately 52% of our oil volumes and none of our natural gas volumes were covered by financial hedges, which resulted in a realized loss on oil derivatives of $1.4 million.
Current wording
In the three months ended March 31, 2025, approximately 65% of our oil volumes and none of our natural gas volumes were covered by financial hedges, which resulted in a realized gain on oil derivatives of $0.7 million. In the three months ended March 31, 2024, approximately 50% of our oil volumes and none of our natural gas volumes were covered by financial hedges, which resulted in a realized gain on oil derivatives of $0.8 million.
Previous wording
At September 30, 2024, all of our derivative contracts were recorded at their fair value, which was a net asset of $13.8 million, an increase in value of $2.7 million from the $11.1 million net asset recorded as of December 31, 2023. The increase was primarily due to decreases in forward commodity prices relative to prices on our open commodity derivative contracts.
Current wording
At March 31, 2025, all of our derivative contracts were recorded at their fair value, which was a net asset of $2.7 million, a decrease in value of $1.0 million from the $3.7 million net asset recorded as of December 31, 2024.
Previous wording
Income Tax Expense. For the three months ended September 30, 2024, we recorded an income tax expense of $6.2 million related to federal and state income taxes compared to an income tax benefit of $0.8 million for the three months ended September 30, 2023.
Current wording
During the three months ended March 31, 2025 and 2024, we recorded an income tax benefit of $0.2 million and $0.7 million, respectively, related to federal and state income taxes.
Previous wording
The provision for income taxes for the three months ended September 30, 2024 and 2023 differs from the amount that would be provided by applying the statutory U.S. federal income tax rate of 21% to pre-tax income primarily due to §162(m) limitations on certain covered employee compensation and state income taxes.
Current wording
The provision for income taxes for the three months ended March 31, 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 primarily due to §162(m) limitations on certain covered employee compensation, other discrete permanent differences related to vesting of RSUs for non-covered employees and state income taxes.
Previous wording
Overview. At September 30, 2024, we had $2.4 million of unrestricted cash on hand and $140.0 million available under the borrowing base in our Revolving Credit Facility. We expect that our liquidity going forward will be primarily derived from cash flows from our operations, cash on hand and availability under the Revolving Credit Facility and that these sources of liquidity will be sufficient to provide us the ability to fund our material cash requirements for the next twelve months, as described below, including our planned capital expenditures program, as well as dividends and our share repurchase program. We may need to fund acquisitions or other business opportunities that support our strategy through additional borrowings under our Revolving Credit Facility or the issuance of equity or debt. Our primary uses of capital have been for the acquisition and development of our oil and natural gas properties and dividend payments. We continually monitor potential capital sources for opportunities to enhance liquidity or otherwise improve our financial position.
Current wording
Overview. At March 31, 2025, we had $4.5 million of cash and cash equivalents on hand and $133.00 million available under the elected commitments in our Revolving Credit Facility. At December 31, 2024, we had $3.0 million of unrestricted cash on hand and $118.00 million available under the elected commitments in our Revolving Credit Facility. We expect that our liquidity going forward will be primarily derived from cash flows from our operations, cash on hand and availability under the Revolving Credit Facility and proceeds from equity or debt offerings and that these sources of liquidity will be sufficient to provide us the ability to fund our material cash requirements for the next twelve months, as described below, including our planned capital expenditures program, as well as dividends and our share repurchase program. We may need to fund acquisitions or other business opportunities that support our strategy through additional borrowings under our Revolving Credit Facility or the issuance of equity or debt. Our primary uses of capital have been for the acquisition and development of our oil and natural gas properties and dividend payments. We continually monitor potential capital sources for opportunities to enhance liquidity or otherwise improve our financial position.
Previous wording
Working Capital. Our working capital balance fluctuates as a result of changes in commodity pricing and production volumes, the collection of revenue receivables, expenditures related to our acquisition and development activity, production operations and the impact of our outstanding commodity derivative instruments.
Current wording
Working Capital. Our working capital balance fluctuates as a result of changes in commodity pricing and production volumes, the collection of revenue receivables, expenditures related to our acquisition and development, and production operations and the impact of our outstanding commodity derivative instruments.
Previous wording
At September 30, 2024, we had a working capital deficit of $18.4 million, compared to a deficit of $2.1 million at December 31, 2023. Current assets decreased by $4.1 million while current liabilities increased by $12.3 million at September 30, 2024, compared to December 31, 2023. The decrease in current assets during the nine months ended September 30, 2024 was primarily due to a decrease of $8.6 million in our revenue receivable, partially offset by a $2.2 million increase in current commodity derivative instruments due to the change in fair value and a $1.9 million increase in cash. The increase in current liabilities during the nine months ended September 30, 2024 was mostly due to an increase of $12.5 million in accounts payable and accrued liabilities primarily as a result of increased accrued oil and gas development costs.
Current wording
At March 31, 2025, the working capital deficit of $26.2 million, narrowed from a deficit of $49.4 million at December 31, 2024. Current assets increased by $19.5 million while current liabilities decreased by $3.7 million at March 31, 2025, compared to December 31, 2024. The increase in current assets during the three months ended March 31, 2025 was primarily due to an increase of $16.8 million in revenue receivable due to an increase in revenue between periods and the timing of revenue receipts from operators. The change in current liabilities during the three months ended March 31, 2025 was mostly due to a decrease of $5.1 million in accounts payable and accrued liabilities as a result of paying down accrued oil and gas development costs and accrued employee compensation, partially offset by an increase of $1.3 million in current derivative instrument liabilities.
Previous wording
Cash Flows. Our cash flows for the nine months ended September 30, 2024 and 2023 are presented below:
Current wording
Cash Flows. Our cash flows for the three months ended March 31, 2025 and 2024 are presented below:
Previous wording
During the nine months ended September 30, 2024, we generated $120.3 million of cash from operations, a $10.0 million increase from the nine months ended September 30, 2023. Cash flows from operating activities are primarily affected by production volumes and commodity prices, net of the effects of settlements of our derivative contracts, and by changes in working capital. Any interim cash needs are funded by cash on hand, cash flows from operations or borrowings under our Revolving Credit Facility. We typically enter into commodity derivative transactions covering a substantial, but varying, portion of our anticipated future oil production for the next 12 to 24 months. A minimum level of derivative coverage is required by certain debt covenants. See Part I, Item 3, “ Quantitative and Qualitative Disclosures about Market Risk.”
Current wording
During the three months ended March 31, 2025, we generated $17.5 million of cash from operating activities, a 56% decrease from the three months ended March 31, 2024. Cash flows from operating activities are primarily affected by production volumes and commodity prices, net of the effects of settlements of our derivative contracts, and by changes in working capital. Any interim cash needs are funded by cash on hand, cash flows from operations or borrowings under our Revolving Credit Facility. We typically enter into commodity derivative transactions covering a substantial, but varying, portion of our anticipated future oil and gas production for the next 12 to 24 months. A minimum level of derivative coverage is required by certain debt covenants. See Part I, Item 3, “ Quantitative and Qualitative Disclosures about Market Risk.”
Previous wording
One of the primary sources of variability in our cash provided by operating activities is commodity price volatility, which we partially mitigate through the use of oil commodity derivative contracts. As of September 30, 2024, we had no natural gas derivative contracts. For more information on our outstanding derivatives, see Note 6 (“Derivative Instruments”) to the Condensed Consolidated Financial Statements.
Current wording
One of the primary sources of variability in our cash provided by operating activities is commodity price volatility, which we partially mitigate through the use of oil and natural gas commodity derivative contracts. For more information on our outstanding derivatives, see Note 6 (“Derivative Instruments”) to the Condensed Consolidated Financial Statements.
Previous wording
Cash used in investing activities during the nine months ended September 30, 2024 was $87.1 million compared to $77.5 million during the nine months ended September 30, 2023. The $9.6 million increase was primarily related to development activity by operators on near term development acquisitions made in the past year. Our cash used in investing activities reflects actual cash spending, which can lag several months from when the related costs were accrued. As a result, our actual cash spending is not always reflective of current levels of development activity. Acquisition and development activities are discretionary. We monitor our capital expenditures on a regular basis, adjusting the amount up or down, and between projects, depending on projected commodity prices, cash flows and the expected return on invested capital. We supplement development activity on our asset base with opportunistic acquisitions of near-term drilling opportunities when development activity by our operators on our existing properties does not meet our development objectives. Our cash spending for acquisition activities was $20.7 million and $21.8 million during the nine months ended September 30, 2024 and 2023, respectively.
Current wording
Cash used in investing activities during the three months ended March 31, 2025 was $30.4 million compared to $32.2 million during the three months ended March 31, 2024. The $1.8 million decrease was related to lower acquisition activity between periods, partially offset by higher development activity. Cash used in investing activities primarily relates to capital expenditures for acquisition and development costs. Our cash used in investing activities reflects actual cash spending, which can lag several months from when the related costs were accrued. As a result, our actual cash spending is not always reflective of current levels of development activity. Acquisition and development activities are discretionary. We monitor our capital expenditures on a regular basis, adjusting the amount up or down, and between projects, depending on projected commodity prices, cash flows and financial returns. We supplement development activity on our asset base with opportunistic acquisitions of near-term drilling opportunities when development activity by our operators on our existing properties does not meet our development objectives. Our cash spending for acquisition activities was $1.5 million and $6.8 million, during the three months ended March 31, 2025 and 2024, respectively, with the decrease attributed to lower activity levels in the lower commodity price environment.
Previous wording
Cash used in financing activities was $31.3 million and $41.1 million during the nine months ended September 30, 2024 and 2023, respectively. The cash used in financing activities during the nine months ended September 30, 2024 was related to $47.6 million in dividends paid and the $7.5 million value of retained shares paid to fund employee tax withholding in connection with the vesting of restricted stock units, which was partially offset by $24.0 million of net borrowings under our Revolving Credit Facility. During the nine months ended September 30, 2023, we had net borrowings of $3.0 million under our Revolving Credit Facility and $43.5 million in dividends paid to our equity holders.
Current wording
Cash provided by and used in financing activities was $14.4 million and $6.4 million during the three months ended March 31, 2025 and 2024, respectively. The cash provided by financing activities during the three months ended March 31, 2025 was related to $49.8 million in cash acquired in the Lucero Acquisition, partially offset by $26.0 million in dividends paid and the $9.2 million value of retained shares paid to fund employee tax withholding in connection with the vesting of restricted stock units. During the three months ended March 31, 2024, we had net borrowings of $17.0 million under our Revolving Credit Facility that was offset by $16.3 million in dividends paid and the $6.9 million value of retained shares paid to fund employee tax withholding in connection with the vesting of restricted stock units.
Previous wording
Revolving Credit Facility. In connection with the Spin-Off, we entered into the secured Revolving Credit Facility with Wells Fargo Bank, N.A., as administrative agent, and a syndicate of banks, as lenders. The Revolving Credit Facility amended and restated the Prior Revolving Credit Facility. The Revolving Credit Facility will mature on April 29, 2026.
Current wording
Revolving Credit Facility. In connection with the Spin-Off, we entered into the secured Revolving Credit Facility with Wells Fargo Bank, N.A., as administrative agent, and a syndicate of banks, as lenders. The Revolving Credit Facility will mature on October 22, 2028.
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Previous report — wording carried elsewhere
The average year-to-date 2024 oil price was $77.53 per barrel or $0.25 higher than the 2023 average year-to-date oil price per barrel. Our settled derivatives increased our average year-to-date 2024 realized oil price per barrel by $0.50 and increased our realized oil price per barrel by $0.45 during the same period in 2023. Our average year-to-date 2024 realized oil price per barrel after reflecting settled derivatives was $72.12 compared to $74.17 during the same period in 2023. The average year-to-date 2024
Previous report — wording carried elsewhere
The mark-to-market fair value of the unsettled commodity derivative instruments will generally be inversely related to the price movement of the underlying commodity. If commodity price trends reverse from period to period, prior unrealized gains may become unrealized losses and vice versa. These unrealized gains and losses will impact our net income in the period reported. The mark-to-market fair value can create non-cash volatility in our reported earnings during periods of commodity price volatility. We have experienced such volatility in the past and are likely to experience it in the future. Gains on our derivatives generally indicate lower oil revenues in the future while losses indicate higher future oil revenues.
Previous report — wording carried elsewhere
The following table sets forth selected financial and operating data for the periods indicated.
Previous report — wording carried elsewhere
Oil and Natural Gas Revenue and Volumes. Total oil and natural gas revenue increased to $186.1 million for the nine months ended September 30, 2024 from $164.6 million for the nine months ended September 30, 2023 with oil revenue increasing while natural gas revenue declined. The net increase in total oil and natural gas revenue was due to a 16% increase in production volumes, driven by acquisition and development activity, net of a 2% decrease in the average realized prices per Boe before hedging for the nine months ended September 30, 2024. The increase in production volumes and decrease in average realized prices per Boe before hedging increased and decreased oil and natural gas revenue by approximately $25.2 million and $3.8 million, respectively.
Previous report — wording carried elsewhere
Our oil price differential to the weighted average benchmark price during the nine months ended September 30, 2024 was negative $6.05 per barrel, as compared to a negative $3.74 per barrel during the nine months ended September 30, 2023, primarily due to less favorable local market pricing as compared to the benchmark price due to regional supply and demand imbalances. Our net realized natural gas price during the nine months ended September 30, 2024 was $1.29 per Mcf, representing a 62% realization relative to the weighted average NYMEX natural gas price, compared to a net realized natural gas price of $1.99 per Mcf during the nine months ended September 30, 2023, representing a 80% realization relative to weighted average NYMEX natural gas price. Fluctuations in our natural gas price differentials and realizations are due to several factors such as NGL value net of processing costs, gathering and transportation fees, takeaway capacity relative to production levels, regional storage capacity, and seasonal refinery maintenance temporarily depressing demand. The exact impact of each of these items is difficult to quantify as each of our operators pass through these costs in a different manner.
Previous report — wording carried elsewhere
Production Tax Expense. Total production taxes increased to $16.6 million for the nine months ended September 30, 2024 from $15.3 million for the nine months ended September 30, 2023. Production taxes are primarily based on oil revenue and natural gas production, excluding gains and losses associated with hedging activities. Production taxes as a percentage of oil and natural gas sales before hedging adjustments were 8.9% and 9.3% for the nine months ended September 30, 2024 and 2023, respectively. The decrease in the production tax rate for the nine months ended September 30, 2024 was primarily due to operators adjusting withholding based on actual tax filings.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, the relationship of capital expenditures, proved reserves and production from certain producing fields yielded a depletion rate (excluding depreciation, amortization and accretion) of $20.52 per Boe compared with $18.08 per Boe for the nine months ended September 30, 2023.
Previous report — wording carried elsewhere
Commodity Derivative Gain (Loss), Net. The commodity derivative gain was $3.9 million for the nine months ended September 30, 2024 compared with a loss of $4.9 million for the nine months ended September 30, 2023. Gain (Loss) on Commodity Derivatives is comprised of (1) cash gains and losses we recognize on settled commodity derivative instruments during the period, and (2) unsettled gains and losses we incur on commodity derivative instruments outstanding at period-end.
Previous report — wording carried elsewhere
The table below summarizes our commodity derivative gains and losses that were recorded in the periods presented.
Previous report — wording carried elsewhere
(1)Realized and unrealized gains and losses on commodity derivatives are presented herein as separate line items but are combined for a total commodity derivative gain (loss) in the statements of operations included in this Form 10-Q. Management believes the separate presentation of the realized and unrealized commodity derivative gains and losses is useful because the realized cash settlement portion provides a better understanding of our hedge position.
Previous report — wording carried elsewhere
In the nine months ended September 30, 2024, approximately 58% of our oil volumes and none of our natural gas volumes were subject to financial hedges, which resulted in a realized gain on oil derivatives of $1.2 million. In the nine months ended September 30, 2023, approximately 51% of our oil volumes and none of our natural gas volumes were covered by financial hedges, which resulted in a realized gain on oil derivatives of $0.9 million.
Previous report — wording carried elsewhere
At September 30, 2024, all of our derivative contracts were recorded at their fair value, which was a net asset of $13.8 million, an increase in value of $2.7 million from the $11.1 million net asset recorded as of December 31, 2023. The increase was primarily due to decreases in forward commodity prices relative to prices on our open commodity derivative contracts.
Previous report — wording carried elsewhere
The provision for income taxes for the nine months ended September 30, 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 primarily due to §162(m) limitations on certain covered employee compensation and state income taxes.