Annual report pursuant to Section 13 and 15(d)

DERIVATIVE INSTRUMENTS (Tables)

v3.22.4
DERIVATIVE INSTRUMENTS (Tables)
12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of open fixed price swap positions Below is a summary of the Company's open fixed price swap positions as of December 31, 2022.
Index Daily Volume Weighted
Average Price
Natural Gas (MMBtu/d) ($/MMBtu)
2023 NYMEX Henry Hub 229,973  $ 4.28 
2024 NYMEX Henry Hub 174,973  $ 4.41 
Oil (Bbl/d) ($/Bbl)
2023 NYMEX WTI 3,000  $ 74.47 
NGL (Bbl/d) ($/Bbl)
2023 Mont Belvieu C3 3,000  $ 38.07 
Index Daily Volume Weighted Average Floor Price Weighted Average Ceiling Price
Natural Gas (MMBtu/d) ($/MMBtu) ($/MMBtu)
2023 NYMEX Henry Hub 285,000  $ 2.93  $ 4.78 
2024 NYMEX Henry Hub 90,000  $ 3.67  $ 6.87 
Index Daily Volume Weighted Average Ceiling Price
Natural Gas (MMBtu/d) ($/MMBtu)
2023 NYMEX Henry Hub 407,925  $ 2.90 
2024 NYMEX Henry Hub 202,000  $ 3.33 
2025 NYMEX Henry Hub 33,315  $ 4.65 
Schedule of natural gas basis swap positions As of December 31, 2022, the Company had the following natural gas basis swap positions open:
Gulfport Pays Gulfport Receives Daily Volume Weighted Average Fixed Spread
Natural Gas (MMBtu/d) ($/MMBtu)
2023 Rex Zone 3 NYMEX Plus Fixed Spread 60,000  $ (0.22)
2023 NGPL TXOK NYMEX Plus Fixed Spread 20,000  $ (0.40)
2023 TETCO M2 NYMEX Plus Fixed Spread 40,082  $ (1.01)
2024 TETCO M2 NYMEX Plus Fixed Spread 9,973  $ (1.03)
Subsequent to December 31, 2022 and as of February 23, 2023, the Company entered into the following derivative contracts:
Period Type of Derivative Instrument Index Daily Volume (MMBtu) Weighted
Average Price
2023 Basis Swaps TETCO M2 76,219  $(0.85)
2023 Basis Swaps Rex Zone 3 59,452  $(0.22)
2023 Basis Swaps NGPL TXOK 42,685  $(0.34)
2024 Swaps NYMEX Henry Hub 30,000  $3.90
2024 Costless Collars NYMEX Henry Hub 60,000 
$3.17 / $3.96
Additionally, subsequent to year end, the Company restructured a portion of its natural gas sold call position by buying back a portion of its 2023 natural gas sold call position, and selling additional natural gas calls for 2023 and 2025. The following table summarizes these transactions:
Period Type of Derivative Instrument Index Daily Volume (MMBtu) Weighted
Average Price
2023 Purchased Gas Call Options NYMEX Henry Hub 134,137  $2.90
2023 Sold Gas Call Options NYMEX Henry Hub 134,137  $3.70
2025 Sold Gas Call Options NYMEX Henry Hub 160,000  $6.04
Schedule of derivative instruments on a gross basis The following table presents the fair value of the Company's derivative instruments on a gross basis at December 31, 2022 and 2021 (in thousands):
Successor
December 31, 2022 December 31, 2021
Short-term derivative asset $ 87,508  $ 4,695 
Long-term derivative asset 26,525  18,664 
Short-term derivative liability (343,522) (240,735)
Long-term derivative liability (118,404) (184,580)
Total commodity derivative position $ (347,893) $ (401,956)
Schedule of net gain (loss) on derivatives
The following table presents the gain and loss recognized in net gain (loss) on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the year ended December 31, 2022, Prior Successor Period, Prior Predecessor Period and year ended December 31, 2020 (in thousands):
Successor Predecessor
Year Ended December 31, 2022 Period from May 18, 2021 through December 31, 2021 Period from January 1, 2021 through May 17, 2021 Year Ended December 31, 2020
Natural gas derivatives - fair value gains (losses) $ 32,797  $ (223,512) $ (123,080) $ (89,310)
Natural gas derivatives - settlement (losses) gains (1,002,098) (300,172) (3,362) 113,075 
Total (losses) gains on natural gas derivatives (969,301) (523,684) (126,442) 23,765 
Oil and condensate derivatives - fair value gains (losses) 6,618  (5,128) (6,126) (2,952)
Oil and condensate derivatives - settlement (losses) gains (39,163) (9,720) —  46,462 
Total (losses) gains on oil and condensate derivatives (32,545) (14,848) (6,126) 43,510 
NGL derivatives - fair value gains (losses) 14,648  (5,322) (4,671) (461)
NGL derivatives - settlement losses (12,549) (12,965) —  (142)
Total gains (losses) on NGL derivatives 2,099  (18,287) (4,671) (603)
Contingent consideration arrangement - fair value losses —  —  —  (1,381)
Total (losses) gains on natural gas, oil and NGL derivatives $ (999,747) $ (556,819) $ (137,239) $ 65,291 
Schedule of recognized derivative assets The following table presents the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value (in thousands):
Successor
As of December 31, 2022
Gross Assets (Liabilities) Presented in the Consolidated Balance Sheets Gross Amounts Subject to Master Netting Agreements Net Amount
Derivative assets $ 114,033  $ (80,345) $ 33,688 
Derivative liabilities $ (461,926) $ 80,345  $ (381,581)
Successor
As of December 31, 2021
Gross Assets (Liabilities) Presented in the Consolidated Balance Sheets Gross Amounts Subject to Master Netting Agreements Net Amount
Derivative assets $ 23,359  $ (20,265) $ 3,094 
Derivative liabilities $ (425,315) $ 20,265  $ (405,050)
Schedule of recognized derivative liabilities The following table presents the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value (in thousands):
Successor
As of December 31, 2022
Gross Assets (Liabilities) Presented in the Consolidated Balance Sheets Gross Amounts Subject to Master Netting Agreements Net Amount
Derivative assets $ 114,033  $ (80,345) $ 33,688 
Derivative liabilities $ (461,926) $ 80,345  $ (381,581)
Successor
As of December 31, 2021
Gross Assets (Liabilities) Presented in the Consolidated Balance Sheets Gross Amounts Subject to Master Netting Agreements Net Amount
Derivative assets $ 23,359  $ (20,265) $ 3,094 
Derivative liabilities $ (425,315) $ 20,265  $ (405,050)