Vitesse Energy, Inc.

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 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 June 30, 2025, we had a working interest in 6,267 gross (223.2 net) productive wells and 245 gross (7.9 net) wells that were being drilled or completed, and an additional 382 gross (15.1 net) wells that had been permitted for development by our operators. In addition, we had a royalty only interest in 1,240 gross (3.0 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 September 30, 2025, we had a working interest in 6,326 gross (225.7 net) productive wells and 268 gross (5.6 net) wells that were being drilled or completed, and an additional 377 gross (15.2 net) wells that had been permitted for development by our operators. In addition, we had a royalty only interest in 1,286 gross (3.2 net) productive wells.

Previous wording

■Production of 18,950 BOE/day with 65% of production from oil.

Current wording

■Production of 18,163 BOE/day with 65% of production from oil.

Previous wording

■Invested $35.7 million in capital development and acquisitions.

Current wording

■Invested $31.8 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 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.

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 general economic and political conditions, 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 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 and changes in 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.

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 and changes in 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, including a prolonged U.S. government shutdown. 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

Commodity derivative gain (loss), net. We utilize commodity derivative financial instruments to reduce our exposure to fluctuations in the prices of oil and gas. Gain (loss) on commodity derivatives, net is comprised of (1) cash gains and losses we recognize on settled commodity derivatives during the period, and (2) non-cash mark-to-market gains and losses we incur on commodity derivative instruments outstanding at period-end.

Current wording

Commodity derivative gain, net. We utilize commodity derivative financial instruments to reduce our exposure to fluctuations in the prices of oil and gas. Gain (loss) on commodity derivatives, net is comprised of (1) cash gains and losses we recognize on settled commodity derivatives during the period, and (2) non-cash mark-to-market gains and losses we incur on commodity derivative instruments outstanding at period-end.

Previous 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 six months ended June 30, 2025, general and administrative expenses included non-recurring costs related to the Lucero Acquisition and an offset for reimbursement of past legal expenses as a result of the settlement discussed in Note 9 (“Commitments and Contingencies”) to the Condensed Consolidated Financial Statements.

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 nine months ended September 30, 2025, general and administrative expenses included non-recurring costs related to the Lucero Acquisition and an offset for reimbursement of past legal expenses as a result of the settlement discussed in Note 9 (“Commitments and Contingencies”) to the Condensed Consolidated Financial Statements.

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. There were no proved oil and gas property impairments during the three and six months ended June 30, 2025 and 2024.

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 and nine months ended September 30, 2025 and 2024.

Previous wording

The average second quarter 2025 oil price was $63.55 per barrel or 21% lower than the average oil price per barrel in the second quarter of 2024. Our settled derivatives increased our realized oil price per barrel by $4.71 in the second quarter of 2025 and decreased our realized oil price per barrel by $1.21 during the second quarter of 2024. Our average second quarter 2025 realized oil price per barrel after reflecting settled derivatives was $64.21 compared to $73.42 during the same period in 2024. The average second quarter 2025 NYMEX natural gas price was $3.19 per MMBtu, or 54% higher than the average NYMEX price per MMBtu in the second quarter of 2024. In the second quarter 2025 and 2024, we had no material natural gas price derivatives in place and our realized natural gas price was $4.17 per Mcf and $1.11 per Mcf, respectively.

Current wording

The average third quarter 2025 NYMEX natural gas price was $3.03 per MMBtu, or 44% higher than the average NYMEX price per MMBtu in the third quarter of 2024. In the third quarter 2025, our settled derivatives increased our realized natural gas price by $0.29 per Mcf, bringing our realized natural gas price after reflecting settled derivatives to $1.14 per Mcf. In the third quarter 2024, we had no natural gas price derivatives in place and our realized natural gas price was $0.90 per Mcf.

Previous wording

The average year-to-date 2025 oil price was $67.36 per barrel or 14% lower than the 2024 average year-to-date oil price per barrel. Our settled derivatives increased our average year-to-date 2025 realized oil price per barrel by $2.92 and decreased our realized oil price per barrel by $0.12 during the same period in 2024. Our average year-to-date 2025 realized oil price per barrel after reflecting settled derivatives was $64.53 compared to $72.56 during the same period in 2024. The average year-to-date 2025 NYMEX natural gas price was $3.63 per MMBtu, or 72% higher than the 2024 average year-to-date price per MMBtu. During the six months ended June 30, 2025 and 2024, we had no material natural gas price derivatives in place and our realized natural gas price was $3.61 per Mcf and $1.50 per Mcf, respectively.

Current wording

The average year-to-date 2025 NYMEX oil price was $66.50 per barrel or 14% lower than the 2024 average year-to-date oil price per barrel. Our settled derivatives increased our average year-to-date 2025 and 2024 realized oil price per barrel by $2.94 and $0.50, respectively. Our average year-to-date 2025 realized oil price per barrel after reflecting settled derivatives was $63.90 compared to $72.12 during the same period in 2024.

Previous wording

Oil and Natural Gas Revenue and Volumes. Oil and natural gas revenue increased to $81.8 million for the three months ended June 30, 2025 from $66.6 million for the three months ended June 30, 2024. The increase in oil and natural gas revenue was due to a 40% increase in production volumes, driven by acquisition and development activity (including the Lucero Acquisition), which was partially offset by a 13% decrease in the average realized prices per Boe before hedging for the three months ended June 30, 2025. The increase in production volumes increased oil and natural gas revenue by approximately $23.5 million, while the decrease in average realized prices per Boe before hedging decreased oil and natural gas revenue by approximately $8.3 million.

Current wording

Oil and Natural Gas Revenue and Volumes. Oil and natural gas revenue increased to $67.4 million for the three months ended September 30, 2025 from $58.3 million for the three months ended September 30, 2024. The increase in oil and natural gas revenue was due to a 40% increase in production volumes, driven by acquisition and development activity (including the Lucero Acquisition), which was partially offset by a 17% decrease in the average realized prices per Boe before hedging for the three months ended September 30, 2025. The increase in production volumes increased oil and natural gas revenue by approximately $19.1 million, while the decrease in average realized prices per Boe before hedging decreased oil and natural gas revenue by approximately $10.0 million.

Previous wording

During the three months ended June 30, 2025, $3.3 million and $13.6 million of recoupments of oil and gas revenue, respectively, were recognized as part of the settlement discussed in Note 9 (“Commitments and Contingencies”) to the Condensed Consolidated Financial Statements. Our oil price differential to the weighted average benchmark price during the three months ended June 30, 2025 was negative $4.17 per barrel, as compared to a negative $5.90 per barrel during the three months ended June 30, 2024, primarily due to the legal settlement increasing realized price per Bbl in the period, partially offset by less favorable local market pricing as compared to the benchmark price. Our net realized natural gas price during the three months ended June 30, 2025 was $4.17 per Mcf, representing a 130% realization relative to the weighted average NYMEX natural gas price, compared to a net realized natural gas price of $1.11 per Mcf during the three months ended June 30, 2024, representing a 52% realization relative to weighted average NYMEX natural gas price. The higher realized price was primarily due to the legal settlement increasing realized price per Mcf in the period. Fluctuations in our natural gas price differentials and realizations are generally 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 passes through these costs in a different manner.

Current wording

Our oil price differential to the weighted average benchmark price during the three months ended September 30, 2025 was negative $5.35 per barrel, as compared to a negative $5.80 per barrel during the three months ended September 30, 2024, primarily due to more favorable local market pricing as compared to the benchmark price. Our net realized natural gas price during the three months ended September 30, 2025 was $0.85 per Mcf, representing a 28% realization relative to the weighted average NYMEX natural gas price, compared to a net realized natural gas price of $0.90 per Mcf during the three months ended

Previous wording

Lease Operating Expense. Lease operating expense increased to $11.38 per Boe for the three months ended June 30, 2025 from $9.99 per Boe for the three months ended June 30, 2024. The increase per Boe for the three months ended June 30, 2025 compared with the three months ended June 30, 2024 was due in part to a $0.59 per Boe increase in workover costs between periods and a $0.25 per Boe increase in transportation expense included in lease operating expense.

Current wording

Lease Operating Expense. Lease operating expense increased to $11.05 per Boe for the three months ended September 30, 2025 from $9.71 per Boe for the three months ended September 30, 2024. The increase per Boe for the three months ended September 30, 2025 compared with the three months ended September 30, 2024 was due in part to a $1.10 per Boe increase in workover costs between periods and a $0.21 per Boe increase in transportation expense included in lease operating expense.

Previous wording

Production Tax Expense. Total production taxes increased to $12.0 million for the six months ended June 30, 2025 from $11.2 million for the six months ended June 30, 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 8.1% and 8.8% for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Production Tax Expense. Total production taxes increased to $6.2 million for the three months ended September 30, 2025 from $5.3 million for the three months ended September 30, 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 9.2% and 9.1% for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

General and Administrative Expense. General and administrative expense decreased to $0.3 million for the three months ended June 30, 2025 from $4.7 million for the three months ended June 30, 2024. During the three months ended June 30, 2025, $7.1 million of litigation costs were reimbursed as a result of the settlement discussed in Note 9 (“Commitments and Contingencies”) to the Condensed Consolidated Financial Statements. Excluding net litigation costs and Lucero Acquisition transaction costs of $0.3 million, general and administrative expense on a per Boe basis decreased to $3.47 for the three months ended June 30, 2025 from $3.84 for the three months ended June 30, 2024. The decrease in per BOE cost is associated with a 40% increase in production between periods.

Current wording

General and Administrative Expense. General and administrative expense increased to $5.7 million for the three months ended September 30, 2025 from $5.2 million for the three months ended September 30, 2024 primarily due to incremental costs related to becoming an operator. General and administrative expense on a per Boe basis decreased to $3.44 for the three months ended September 30, 2025 from $4.37 for the three months ended September 30, 2024. The decrease in per Boe cost is associated with economies of scale on a 40% increase in production between periods.

Previous wording

DD&A. DD&A increased to $34.6 million for the three months ended June 30, 2025 compared with $25.3 million for the three months ended June 30, 2024. The increase was the result of a 40% increase in production, partially offset by a $0.55 per Boe decrease in the DD&A rate for the three months ended June 30, 2025 compared with the three months ended June 30, 2024. The increase in production accounted for a $9.9 million increase in DD&A expense while the decrease in the DD&A rate accounted for a $0.7 million decrease in DD&A expense.

Current wording

DD&A. DD&A increased to $34.2 million for the three months ended September 30, 2025 compared with $24.9 million for the three months ended September 30, 2024. The increase was the result of a 40% increase in production, partially offset by a $0.34 per Boe decrease in the DD&A rate for the three months ended September 30, 2025 compared with the three months ended September 30, 2024. The increase in production accounted for a $9.7 million increase in DD&A expense while the decrease in the DD&A rate accounted for a $0.4 million decrease in DD&A expense.

Previous wording

For the three months ended June 30, 2025, the relationship of capital expenditures, proved reserves and production from certain producing fields yielded a depletion rate (excluding depreciation, amortization and accretion) of $19.88 per Boe compared with $20.45 per Boe for the three months ended June 30, 2024.

Current wording

For the three months ended September 30, 2025, the relationship of capital expenditures, proved reserves and production from certain producing fields yielded a depletion rate (excluding depreciation, amortization and accretion) of $20.32 per Boe compared with $20.67 per Boe for the three months ended September 30, 2024.

Previous wording

Equity-Based Compensation. During the three months ended June 30, 2025, equity-based compensation expense increased to $2.4 million from $2.0 million during the three months ended June 30, 2024. Equity-based compensation expense was higher in 2025 due to additional LTIP RSUs and PSUs awarded to employees and directors at a higher grant date price.

Current wording

Equity-Based Compensation. During the three months ended September 30, 2025, equity-based compensation expense increased to $2.7 million from $2.2 million during the three months ended September 30, 2024. Equity-based compensation expense was higher in 2025 due to additional LTIP RSUs and PSUs awarded to employees and directors at a higher grant date price.

Previous wording

Interest Expense. Interest expense decreased to $2.5 million for the three months ended June 30, 2025 from $2.6 million for the three months ended June 30, 2024. The decrease for the three months ended June 30, 2025 was due to the debt balance decreasing to $106.0 million from $115.0 million at June 30, 2024.

Current wording

Interest Expense. Interest expense decreased to $2.4 million for the three months ended September 30, 2025 from $2.7 million for the three months ended September 30, 2024. The decrease for the three months ended September 30, 2025 was primarily due to a lower interest rate during the period.

Previous wording

Commodity Derivative Gain, Net. The commodity derivative gain was $18.5 million for the three months ended June 30, 2025 compared with a gain of $0.4 million for the three months ended June 30, 2024. 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 Gain, Net. The commodity derivative gain was $0.7 million for the three months ended September 30, 2025 compared with a gain of $17.4 million for the three months ended September 30, 2024. 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 wording

In the three months ended June 30, 2025, approximately 58% of our oil volumes and no material natural gas volumes were covered by financial hedges, which resulted in a realized gain on oil derivatives of $5.3 million. In the three months ended June 30, 2024, approximately 62% 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 $1.0 million.

Current wording

In the three months ended September 30, 2025, approximately 63% of our oil volumes were covered by financial hedges, which resulted in a realized gain on oil derivatives of $3.2 million. In the three months ended September 30, 2025, a portion of our natural gas volumes was covered by residue gas and NGL financial hedges, which resulted in a realized gain on gas and NGL derivatives of $1.0 million. 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.

Previous wording

At June 30, 2025, all of our derivative contracts were recorded at their fair value, which was a net asset of $15.9 million, an increase in value of $13.2 million from the $2.7 million net asset recorded as of March 31, 2025. The increase was primarily due to decreases in forward commodity prices relative to prices on our open commodity derivative contracts.

Current wording

At September 30, 2025, all of our derivative contracts were recorded at their fair value, which was a net asset of $12.3 million, a decrease in value of $3.6 million from the $15.9 million net asset recorded as of June 30, 2025. The decrease was primarily due to the gains realized on commodity derivative contracts in the period.

Previous wording

Income Tax Expense. During the three months ended June 30, 2025, we recorded an income tax expense of $9.9 million related to federal and state income taxes compared to an income tax expense of $3.7 million for the three months ended June 30, 2024.

Current wording

Income Tax Expense. During the three months ended September 30, 2025, we recorded an income tax benefit of $0.3 million related to federal and state income taxes compared to an income tax expense of $6.2 million for the three months ended September 30, 2024.

Previous wording

Oil and Natural Gas Revenue and Volumes. Oil and natural gas revenue increased to $147.9 million for the six months ended June 30, 2025 from $127.8 million for the six months ended June 30, 2024. The increase in oil and natural gas revenue was due to a 30% increase in production volumes, driven by acquisition and development activity (including the Lucero Acquisition), which was partially offset by a 11% decrease in the average realized prices per Boe before hedging for the six months ended June 30, 2025. The increase in production volumes increased oil and natural gas revenue by approximately $33.8 million, while the decrease in average realized prices per Boe before hedging decreased oil and natural gas revenue by approximately $13.6 million.

Current wording

Oil and Natural Gas Revenue and Volumes. Oil and natural gas revenue increased to $215.4 million for the nine months ended September 30, 2025 from $186.1 million for the nine months ended September 30, 2024. The increase in oil and natural gas revenue was due to a 33% increase in production volumes, driven by acquisition and development activity (including the Lucero Acquisition), which was partially offset by a 13% decrease in the average realized prices per Boe before hedging for the nine months ended September 30, 2025. The increase in production volumes increased oil and natural gas revenue by approximately $53.4 million, while the decrease in average realized prices per Boe before hedging decreased oil and natural gas revenue by approximately $24.1 million.

Previous wording

During the six months ended June 30, 2025, $3.3 million and $13.6 million of recoupments of oil and gas revenue, respectively, were recognized as part of the settlement discussed in Note 9 (“Commitments and Contingencies”) to the Condensed Consolidated Financial Statements. Our oil price differential to the weighted average benchmark price during the six months ended June 30, 2025 was negative $5.32 per barrel, as compared to a negative $6.18 per barrel during the six months ended June 30, 2024, primarily due to the legal settlement increasing the realized price per Bbl in the period, partially offset by less favorable local market pricing as compared to the benchmark price. Our net realized natural gas price during the six months ended June 30, 2025 was $3.61 per Mcf, representing a 101% realization relative to the weighted average NYMEX natural gas price, compared to a net realized natural gas price of $1.50 per Mcf during the six months ended June 30, 2024, representing a 73% realization relative to weighted average The higher realized price was primarily due to the legal settlement increasing the realized price per Mcf in the period. 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 passes through these costs in a different manner.

Current wording

During the nine months ended September 30, 2025, $3.3 million and $13.6 million of recoupments of oil and gas revenue, respectively, were recognized as part of the settlement discussed in Note 9 (“Commitments and Contingencies”) to the Condensed Consolidated Financial Statements. Our oil price differential to the weighted average benchmark price during the nine months ended September 30, 2025 was negative $5.33 per barrel, as compared to a negative $6.05 per barrel during the nine months ended September 30, 2024, primarily due to the legal settlement increasing the realized price per Bbl in the period, partially offset by less favorable local market pricing as compared to the benchmark price. Our net realized natural gas price during the nine months ended September 30, 2025 was $2.60 per Mcf, representing a 77% realization relative to the weighted average NYMEX natural gas price, compared to a net realized natural gas price of $1.29 per Mcf during the nine months ended September 30, 2024, representing a 62% realization relative to the weighted average NYMEX natural gas price. The higher realized price was primarily due to the legal settlement increasing the realized price per Mcf in the period. 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 passes through these costs in a different manner.

Previous wording

Lease Operating Expense. Lease operating expense increased to $10.90 per Boe for the six months ended June 30, 2025 from $10.15 per Boe for the six months ended June 30, 2024. The increase per Boe for the six months ended June 30, 2025 compared with the six months ended June 30, 2024 was due in part to a $1.00 per Boe increase in workover costs between periods and a $0.19 per Boe increase in transportation expense included in lease operating expense.

Current wording

Lease Operating Expense. Lease operating expense increased to $10.95 per Boe for the nine months ended September 30, 2025 from $10.00 per Boe for the nine months ended September 30, 2024. The increase per Boe for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024 was due in part to a $1.03 per Boe increase in workover costs between periods.

Previous wording

Production Tax Expense. Total production taxes increased to $6.2 million for the three months ended June 30, 2025 from $5.4 million for the three months ended June 30, 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 7.6% and 8.1% for the three months ended June 30, 2025 and 2024, respectively. The production tax rate was lower for the three months ended June 30, 2025 due to the legal settlement increasing revenue in the period.

Current wording

Production Tax Expense. Total production taxes increased to $18.2 million for the nine months ended September 30, 2025 from $16.6 million for the nine months ended September 30, 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 8.4% and 8.9% for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

General and Administrative Expense. General and administrative expense increased to $12.4 million for the six months ended June 30, 2025 from $10.1 million for the six months ended June 30, 2024. During the six months ended June 30, 2025, $7.1 million of litigation costs were reimbursed as a result of the settlement discussed in Note 9 (“Commitments and Contingencies”) to the Condensed Consolidated Financial Statements. Excluding net litigation costs and Lucero Acquisition transaction costs of $4.9 million, general and administrative expense on a per Boe basis decreased to $3.87 for the six months ended June 30, 2025 from $4.26 for the six months ended June 30, 2024. The decrease in per BOE cost is associated with a 30% increase in production between periods.

Current wording

General and Administrative Expense. General and administrative expense increased to $18.2 million for the nine months ended September 30, 2025 from $15.3 million for the nine months ended September 30, 2024. During the nine months ended September 30, 2025, $7.1 million of litigation costs were reimbursed as a result of the settlement discussed in Note 9 (“Commitments and Contingencies”) to the Condensed Consolidated Financial Statements. Excluding net litigation costs and Lucero Acquisition transaction costs of $5.2 million, general and administrative expense on a per Boe basis decreased to $3.64 for the nine months ended September 30, 2025 from $4.30 for the nine months ended September 30, 2024. The decrease in per Boe cost is associated with economies of scale on a 33% increase in production between periods.

Previous wording

DD&A. DD&A increased to $61.1 million for the six months ended June 30, 2025 compared with $48.9 million for the six months ended June 30, 2024. The increase was the result of a 30% increase in production, partially offset by a $0.70 per Boe decrease in the DD&A rate for the six months ended June 30, 2025 compared with the six months ended June 30, 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 $14.0 million increase in DD&A expense while the decrease in the DD&A rate accounted for a $1.7 million decrease in DD&A expense.

Current wording

DD&A. DD&A increased to $95.4 million for the nine months ended September 30, 2025 compared with $73.8 million for the nine months ended September 30, 2024. The increase was the result of a 33% increase in production, partially offset by a $0.57 per Boe decrease in the DD&A rate for the nine months ended September 30, 2025 compared with the nine months ended September 30, 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 $23.6 million increase in DD&A expense while the decrease in the DD&A rate accounted for a $2.0 million decrease in DD&A expense.

Previous wording

For the six months ended June 30, 2025, the relationship of capital expenditures, proved reserves and production from certain producing fields yielded a depletion rate (excluding depreciation, amortization and accretion) of $19.74 per Boe compared with $20.45 per Boe for the six months ended June 30, 2024.

Current wording

For the nine months ended September 30, 2025, the relationship of capital expenditures, proved reserves and production from certain producing fields yielded a depletion rate (excluding depreciation, amortization and accretion) of $19.95 per Boe compared with $20.52 per Boe for the nine months ended September 30, 2024.

Previous wording

Equity-Based Compensation. During the six months ended June 30, 2025, equity-based compensation expense increased to $4.9 million from $3.7 million during the six months ended June 30, 2024. Equity-based compensation expense was higher in 2025 due to additional LTIP RSUs and PSUs awarded to employees and directors at a higher grant date price.

Current wording

Equity-Based Compensation. During the nine months ended September 30, 2025, equity-based compensation expense increased to $7.6 million from $5.9 million during the nine months ended September 30, 2024. Equity-based compensation expense was higher in 2025 due to additional LTIP RSUs and PSUs awarded to employees and directors at a higher grant date price.

Previous wording

Interest Expense. Interest expense increased to $5.4 million for the six months ended June 30, 2025 from $4.8 million for the six months ended June 30, 2024. The increase for the six months ended June 30, 2025 was due to a higher average debt balance during the six months ended June 30, 2025 compared to the six months ended June 30, 2024, partially offset by a lower interest rate.

Current wording

Interest Expense. Interest expense increased to $7.8 million for the nine months ended September 30, 2025 from $7.5 million for the nine months ended September 30, 2024. The increase for the nine months ended September 30, 2025 was due to a higher average debt balance during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, partially offset by a lower interest rate.

Previous wording

Commodity Derivative Gain (Loss), Net. The commodity derivative gain was $18.3 million for the six months ended June 30, 2025 compared with a loss of $13.4 million for the six months ended June 30, 2024. 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 Gain, Net. The commodity derivative gain was $19.0 million for the nine months ended September 30, 2025 compared with a gain of $3.9 million for the nine months ended September 30, 2024. 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 wording

In the six months ended June 30, 2025, approximately 52% of our oil volumes and no material natural gas volumes were subject to financial hedges, which resulted in a realized gain on oil derivatives of $6.0 million. In the six months ended June 30, 2024, approximately 56% 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 $0.2 million.

Current wording

In the nine months ended September 30, 2025, approximately 62% of our oil volumes were subject to financial hedges, which resulted in a realized gain on oil derivatives of $9.2 million. In the nine months ended September 30, 2025, a portion of our natural gas volumes was covered by residue gas and NGL financial hedges, which resulted in a realized gain on gas and NGL derivatives of $1.0 million. In the nine months ended September 30, 2024, approximately 58% 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 $1.2 million.

Previous wording

At June 30, 2025, all of our derivative contracts were recorded at their fair value, which was a net asset of $15.9 million, an increase in value of $12.2 million from the $3.7 million net asset recorded as of December 31, 2024. The increase was primarily due to decreases in forward commodity prices relative to prices on our open commodity derivative contracts.

Current wording

At September 30, 2025, all of our derivative contracts were recorded at their fair value, which was a net asset of $12.3 million, an increase in value of $8.6 million from the $3.7 million net asset recorded as of December 31, 2024. The increase was primarily due to decreases in forward commodity prices since December 31, 2024 relative to prices on our open commodity derivative contracts.

Previous wording

Income Tax Expense. During the six months ended June 30, 2025, we recorded an income tax expense of $9.7 million related to federal and state income taxes compared to an income tax expense of $2.9 million for the six months ended June 30, 2024.

Current wording

Income Tax Expense. During the nine months ended September 30, 2025, we recorded an income tax expense of $9.4 million related to federal and state income taxes compared to an income tax expense of $9.2 million for the nine months ended September 30, 2024.

Previous wording

The provision for income taxes for the six months ended June 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 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.

Current wording

The provision for income taxes for the 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 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 June 30, 2025, we had $2.0 million of unrestricted cash on hand and $144.0 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 $118.0 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, 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.

Current wording

Overview. At September 30, 2025, we had $5.6 million of unrestricted cash on hand and $136.0 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 $118.0 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, 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

At June 30, 2025, we had a working capital deficit of $3.8 million, compared to a deficit of $49.4 million at December 31, 2024. Current assets increased by $17.1 million while current liabilities decreased by $28.6 million at June 30, 2025, compared to December 31, 2024. The increase in current assets during the six months ended June 30, 2025 was primarily due to an increase of $10.4 million in our current commodity derivative instruments due to the change in fair value and a $7.2 million increase in revenue receivable due to increased production. The decrease in current liabilities during the six months ended June 30, 2025 was mostly due to a decrease of $28.5 million in accounts payable and accrued liabilities as a result of paying accrued oil and gas development costs and accrued employee compensation.

Current wording

At September 30, 2025, we had a working capital deficit of $9.7 million, compared to a deficit of $49.4 million at December 31, 2024. Current assets increased by $6.1 million while current liabilities decreased by $33.5 million at September 30, 2025, compared to December 31, 2024. The increase in current assets during the nine months ended September 30, 2025 was primarily due to an increase of $7.5 million in our current commodity derivative instruments due to the change in fair value and a $2.6 million increase in cash, partially offset by a $5.0 million decrease in revenue receivable. The decrease in current liabilities during the nine months ended September 30, 2025 was principally due to a decrease of $33.4 million in accounts payable and accrued liabilities as a result of paying accrued oil and gas development costs and accrued employee compensation.

Previous wording

Cash Flows. Our cash flows for the six months ended June 30, 2025 and 2024 are presented below:

Current wording

Cash Flows. Our cash flows for the nine months ended September 30, 2025 and 2024 are presented below: