What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-02-23 compared with 2023-02-24 · 79 added, 78 removed, 587 unchanged (21% of the section changed)

44 unchanged sentences

• the actions of OPEC and other major oil producing countries, such as Russia, relating to oil price and production levels, including announcements of potential changes to such levels;

• worldwide and regional economic, political and social conditions impacting the global supply and demand for oil and natural gas, which may be driven by various risks including war, terrorism, political unrest, or health epidemics (such as the global COVID-19 coronavirus outbreak);

• the price and quantity of imports of foreign oil and natural gas;

2 unchanged sentences

• political and economic conditions, including embargoes, in oil-producing countries or affecting other oil-producing activity;

• the outbreak of military hostilities, including the ongoing conflict between Russia and Ukraine and the destabilizing effect such conflict continues to pose for the European continent or the global oil and natural gas markets;

• the level of global oil and natural gas exploration, production activity and inventories;

16 unchanged sentences

In addition, drilling and producing operations on our acreage may be curtailed, delayed or canceled by our operators as a result of other factors, including:

• declines in oil or natural gas prices, as occurred in 2020 in connection with the COVID-19 pandemic;

• declines in oil or natural gas prices;

• infrastructure limitations, such as the gas gathering and processing constraints experienced in the Williston Basin in 2019;

68 unchanged sentences

DAPL poses a threat to the Missouri River and drinking water supply of the Standing Rock Sioux Reservation.

The temporary shutdown order was overturned by the U.S.

Court of Appeals in August 2020.

DAPL currently remains in operation while the U.S.

Army Corps of Engineers (“USACE”) conducts the review, which is currently anticipated to be completed in the spring of 2023.

In addition, on September 20, 2021, the owner of DAPL filed a petition with the U.S.

Supreme Court seeking review of the lower courts’ decisions requiring a new EIS and permit, which was denied in February 2022.

Army Corps of Engineers (“USACE”) conducts the EIS, which was released in draft form in September 2023 and was open for public comment until mid-December 2023.

The date that the final EIS will be published is not yet known.

Following completion of the EIS, the USACE will determine whether to grant DAPL an easement to cross the Missouri River or to shut down the pipeline, unless the U.S.

23 unchanged sentences

We are subject to physical risks arising from climate change, which may have a negative impact on our business and results of operations.

Many scientists have concluded that increasing concentrations of GHG in the earth’s atmosphere may produce significant physical effects, such as increased frequency and severity of storms, droughts and floods, among other climatic phenomena.

The physical effects of adverse weather conditions, such as increased frequency and severity of droughts, storms, floods and other climatic events, could adversely affect or delay demand for oil and natural gas products or cause us or our third party operators to incur significant costs in preparing for, or responding to, the effects of climatic events themselves, which may not be fully insured.

Most scientists have concluded that increasing concentrations of GHG in the earth’s atmosphere may produce significant physical effects on weather conditions, such as increased frequency and severity of storms, extreme temperatures, droughts and floods, among other climatic phenomena.

If any such effects were to occur, they could adversely affect or delay demand for oil and natural gas products or cause us or our third party operators to incur significant costs in preparing for, or responding to, the effects of climatic events themselves, which may not be fully insured.

Energy needs could increase or decrease as a result of extreme weather conditions depending on the duration and magnitude of any such climate changes.

1 unchanged sentence

To the extent the frequency of extreme weather events increases, this could impact our business in various ways, including damage to operators’ facilities at our properties or increased insurance premiums.

Potential adverse effects on our third party operators could also include disruption of their production activities and supply chain.

Any of these effects could have an adverse effect on our business, results of operations and financial condition.

11 unchanged sentences

Dependence on our operators could prevent us from realizing our target returns for those locations.

The success and timing of development activities by our operators will depend on a number of factors that will largely be outside of our control, including oil and natural gas prices and other factors generally affecting industry operating environment;

the timing and amount of capital expenditures;

13 unchanged sentences

Sustained levels of high inflation caused the U.S.

Federal Reserve and other central banks to increase interest rates multiple times in 2022 in an effort to curb inflationary pressure on the costs of goods and services, which could have the effects of raising the cost of capital and depressing economic growth, either of which (or the combination thereof) could hurt the financial and operating results of our business.

Federal Reserve to increase the federal funds interest rate by 5.25% between March 2022 and December 2023 in an effort to curb inflationary pressure on the costs of goods and services.

While inflationary pressures in the United States’ economy have begun to subside, we continue to be impacted by the increased federal funds interest rate, which could additionally have the effects of raising the cost of capital and depressing economic growth, either of which (or the combination thereof) could hurt the financial and operating results of our business.

To the extent elevated inflation remains, we may experience further cost increases for our operations.

6 unchanged sentences

Any delay in the drilling of new wells or significant increase in drilling costs could reduce our revenues and cash flows.

The COVID-19 pandemic had, and events beyond our control, including a global or domestic health crisis, may have, a material adverse effect on our financial condition and results of operations.

We face risks related to public health crises, including the COVID-19 pandemic.

The effects of the COVID-19 pandemic, including travel bans, prohibitions on group events and gatherings, shutdowns of certain businesses, curfews, shelter-in-place orders and recommendations to practice social distancing in addition to other actions taken by both businesses and governments, resulted in a significant and swift reduction in international and U.S.

economic activity in 2020.

The collapse in the demand for oil caused by this unprecedented global health and economic crisis contributed to the significant decrease in crude oil prices in 2020 and had a material adverse impact on our financial condition and results of operations.

Since the beginning of 2021, the distribution of COVID-19 vaccines progressed and many government-imposed restrictions were relaxed or rescinded.

However, we continue to monitor the effects of the pandemic on our operations.

The impact of any new, more contagious or harmful COVID-19 variants that may emerge, and the effectiveness of COVID-19 vaccines against variants and the related responses by governments, including reinstated government-imposed lockdowns or other measures, cannot be predicted at this time.

Both the health and economic aspects of the COVID-19 pandemic remain highly fluid and the future course of each is uncertain.

We cannot foresee whether the outbreak of COVID-19 will be effectively contained on a sustained basis, nor can we predict the severity and duration of its impact or the occurrence of other events beyond our control, including other potential global or domestic health crisis.

If the impact of COVID-19 is not effectively and timely controlled on a sustained basis going forward, or if other events beyond our control, including other potential global or domestic health crisis, were to emerge, our business operations and financial condition may be materially and adversely affected by factors that we cannot foresee.

While we have not incurred significant disruptions to our operations during the years ended December 31, 2022 and 2021 as a direct result of the COVID-19 pandemic, the continuation of the COVID-19 pandemic may materially and adversely affect, our business, operating and financial results and liquidity in the future.

To the extent the COVID-19 pandemic or another public health crisis adversely affects our business and financial results, it may also have the effect of heightening many of the other risks set forth in this Risk Factors section of this Form 10-K, such as those relating to our financial performance and debt obligations.

We are unable to provide any prediction as to the ultimate adverse impact of COVID-19 on our business, which will depend on numerous evolving factors and future developments, including its effect on the demand for oil, natural gas, and NGLs, the response of the overall economy and the financial markets as well as the effect of governmental actions taken in response thereto.

Any of these outcomes could have a material adverse effect on our business, operations, financial results and liquidity

The development of our proved undeveloped reserves may take longer and may require higher levels of capital expenditures than we currently anticipate.

35 unchanged sentences

Inspections will not always be performed on every well, and environmental problems are not necessarily observable even when an inspection is undertaken.

Even when problems are identified, the seller may be unwilling or unable to provide effective contractual protection against all or a portion of the underlying deficiencies.

Even when problems are identified, the seller may be unwilling or unable to

provide effective contractual protection against all or a portion of the underlying deficiencies.

We are often not entitled to contractual indemnification for environmental liabilities and acquire properties on an “as is” basis, and, as is the case with certain liabilities associated with the assets acquired in our recent acquisitions, we are entitled to indemnification for only certain environmental liabilities.

11 unchanged sentences

The members of our management team may terminate their employment with our company at any time.

If we were to lose members of our

management team, we may not be able to replace the knowledge or relationships that they possess and our ability to execute our business plan could be materially harmed.

If we were to lose members of our management team, we may not be able to replace the knowledge or relationships that they possess and our ability to execute our business plan could be materially harmed.

Deficiencies of title to our leased interests could significantly affect our financial condition.

14 unchanged sentences

acquisition of assets offered for sale by other companies;

access to capital (debt and equity) for financing and operational purposes;

access to capital (debt and equity) for financing and operational

purchasing, leasing, hiring, chartering or other procuring of equipment by our operators that may be scarce;

13 unchanged sentences

If the actual amount of production is lower than the notional amount that is subject to our derivative financial instruments, we might be forced to satisfy all or a portion of our derivative transactions without the benefit of the cash flow from our sale of the underlying physical commodity, resulting in a substantial diminution of our liquidity.

As a result of

these factors, our hedging activities may not be as effective as we intend in reducing the volatility of our cash flows, and in certain circumstances may actually increase the volatility of our cash flows.

As a result of these factors, our hedging activities may not be as effective as we intend in reducing the volatility of our cash flows, and in certain circumstances may actually increase the volatility of our cash flows.

In addition, such transactions may expose us to the risk of loss in certain circumstances, including instances in which a counterparty to our derivative contracts is unable to satisfy its obligations under the contracts;

13 unchanged sentences

however, any interruptions to our arrangements with third parties for our computing and communications infrastructure or any other interruptions to, or breaches of, our information systems could lead to data corruption, communication interruption, loss of sensitive or confidential information or otherwise significantly disrupt our business operations.

Although we utilize various procedures and controls to monitor these threats and mitigate our exposure to such threats, there can be no assurance that these procedures and controls will be sufficient in preventing security threats from materializing.

Although we utilize various procedures and controls to monitor these

threats and mitigate our exposure to such threats, there can be no assurance that these procedures and controls will be sufficient in preventing security threats from materializing.

Furthermore, various third-party resources that we rely on, directly or indirectly, in the operation of our business (such as pipelines and other infrastructure) could suffer interruptions or breaches from cyber-attacks or similar events that are entirely outside our control, and any such events could significantly disrupt our business operations and/or have a material adverse effect on our results of operations.

7 unchanged sentences

Climate change legislation and regulatory initiatives may arise from a variety of sources, including international, national, regional and state levels of government and associated administrative bodies, seeking to monitor, restrict or regulate existing emissions of GHGs, such as carbon dioxide and methane, as well as to restrict or eliminate future emissions.

Accordingly, our business and operations, and those of our operating partners, are subject to executive, regulatory, political and

financial risks associated with oil and natural gas services and products and the emission of GHGs.

Accordingly, our business and operations, and those of our operating partners, are subject to executive, regulatory, political and financial risks associated with oil and natural gas services and products and the emission of GHGs.

Any legislation or regulatory programs related to climate change could increase our costs and require substantial capital, compliance, operating and maintenance costs, and reduce demand for oil and natural gas products and services.

7 unchanged sentences

Financial institutions may elect in the future to shift some or all of their investment into non-fossil fuel related sectors.

There is also a risk that financial institutions may be required to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector.

Some investors, including certain pension funds, university endowments and family foundations, have stated policies to reduce or eliminate their investments in the oil and natural gas sector based on social and environmental considerations.

1 unchanged sentence

This may also result in a reduction of available capital funding for potential development projects, further impacting our future financial results.

Ultimately, any legislation, regulatory programs, technological advances or social pressures related to climate change could increase our operating and compliance costs, reduce demand for oil and natural gas services and products, together with a change in investor sentiment, may have a material adverse effect on our business, financial condition, results of operations and cash flows.

Furthermore, if we are unable to achieve the desired level of capital efficiency or free cash flow within the timeframe expected by the market, our stock price may be adversely affected.

Increased scrutiny and changing stakeholder expectations with respect to environmental, social and governance (“ESG”) matters may impact our business and expose us to additional risks.

In recent years, companies across all industries are facing increasing scrutiny from stakeholders related to their ESG and sustainability practices.

A number of advocacy groups, both domestically and internationally, have campaigned for governmental and private action to promote change at public companies related to ESG matters, including increasing attention and demands for action related to climate change, promoting the use of substitutes to fossil fuel products and encouraging the divestment of companies in the fossil fuel industry.

Increasing attention to climate change, for example, may result in demand shifts for natural gas and oil products, additional governmental investigations, private litigation against us, operational delays or restrictions, increased operating costs, and additional regulatory burdens.

To the extent that societal pressures or political or other factors are involved, it is possible that such liability could be imposed without regard to our causation of or contribution to the asserted damage, or to other mitigating factors.

Increasing attention to climate change may also result in additional governmental investigations, private litigation against us, operational delays or restrictions, increased operating costs, and additional regulatory burdens.

For example, claims have been made against certain companies in the energy industry alleging that GHG emissions from oil and natural gas operations constitute a public nuisance under federal and/or state common law, or alleging that the companies have been aware of the adverse effects of climate change for some time but failed to adequately disclose such impacts to their investors or customers.

3 unchanged sentences

Moreover, governmental authorities exercise considerable discretion in the timing and scope of permit issuance and the public may engage in the permitting process, including through intervention in the courts.

Negative public perception could cause the permits our operating partners need to conduct their operations to be withheld, delayed or burdened by requirements that restrict our ability to profitably conduct our business.

Further, failure or a perception (whether or not valid) of failure to implement our ESG strategy or achieve sustainability goals we have set could damage our reputation, causing our investors or other stakeholders to lose confidence in our company, and negatively impact our operations.

Negative public perception in relation to climate change or other environmental matters could cause the permits our operating partners need to conduct their operations to be withheld, delayed or burdened by requirements that restrict our ability to profitably conduct our business.

Furthermore, if we are unable to achieve the desired level of capital efficiency or free cash flow within the timeframe expected by the market, our stock price may be adversely affected.

Increased scrutiny and changing stakeholder expectations with respect to environmental, social and governance (“ESG”) matters may impact our business and expose us to additional risks.

In recent years, companies across all industries are facing increasing scrutiny from stakeholders related to their ESG and sustainability practices.

Failure or a perception (whether or not valid) of failure to implement our ESG strategy or achieve sustainability goals we have set could damage our reputation, causing our investors or other stakeholders to lose confidence in our company, and negatively impact our operations.

There can be no assurance that we will be able to accomplish any announced goals, initiatives, commitments or objectives related to our ESG strategy, as statements regarding the same reflect our current plans and aspirations and are not guarantees that we will be able to achieve them within the timelines we announce, or at all.

We in certain circumstances could determine in our discretion that it is not feasible or practical to implement or complete certain of our ESG goals, initiatives, policies or procedures based on cost, timing or other considerations.

We may determine in our discretion that it is not feasible or practical to implement or complete certain of our ESG goals, initiatives, policies or procedures based on cost, timing or other considerations.

Our continuing efforts to research, establish, accomplish and accurately report on the implementation of our ESG strategy, including any ESG goals, may also create additional operational risks and expenses and expose us to reputational, legal and other risks.

23 unchanged sentences

Our Revolving Credit Facility and other agreements governing indebtedness contain operating and financial restrictions that may restrict our business and financing activities.

Our Revolving Credit Facility, the indenture governing our Senior Notes due 2028 (the “Senior Notes Indenture”), and any future indebtedness we incur may contain a number of restrictive covenants that will impose significant operating and

financial restrictions on us, including restrictions on our ability to, among other things:

Our Revolving Credit Facility, the indenture the “2028 Notes Indenture” governing our 8.125% senior notes due 2028 (the “Senior Notes due 2028”), and the indenture the “2031 Notes Indenture” and, together with the 2028 Notes Indenture, the “Senior Notes Indentures”) governing our 8.750% senior notes due 2031 (the “Senior Notes due 2031” and, together with the Senior Notes due 2028, the “Senior Notes”), and any future indebtedness we incur may contain a number of restrictive covenants that will impose significant operating and financial restrictions on us, including restrictions on our ability to, among other things:

declare or pay any dividend or make any other distributions on, purchase or redeem our equity interests or purchase or redeem certain debt;

23 unchanged sentences

Any insufficiency could negatively impact our business.

A range of economic, competitive, business and industry factors will affect our future financial performance, and, as a result, our ability to generate cash flow from operations and to pay our debt.

A range of economic, competitive, business and industry factors will affect our future financial

performance, and, as a result, our ability to generate cash flow from operations and to pay our debt.

Many of these factors, such as oil and natural gas prices, economic and financial conditions in our industry and the global economy or competitive initiatives of our competitors, are beyond our control.

5 unchanged sentences

Our inability to generate sufficient cash flow to satisfy our debt obligations, or to obtain alternative financing, could materially and adversely affect our business, financial condition, results of operations and prospects.

Our ability to pay dividends to our stockholders is restricted by applicable laws and regulations and requirements under certain of our debt agreements, including our Revolving Credit Facility and the Senior Notes (as defined below).

Holders of our common stock are only entitled to receive such cash dividends as our board of directors, in its sole discretion, may declare out of funds legally available for such payments.

On May 6, 2021, our board of directors declared our first cash dividend on our common stock in the amount of $0.03 per share.

The dividend was paid on July 30, 2021 to stockholders of record as of the close of business on June 30, 2021.

Our board of directors declared increased quarterly cash dividends on our common stock for each of the following completed fiscal quarters, and our management intends to recommend to our board of directors a further increase in our quarterly cash dividends on our common stock going forward.

Any such increase would be conditioned upon, among other things, the approval of such increase by our board of directors and the absence of any material adverse developments or potentially attractive opportunities that would make such an increase inadvisable.

On August 1, 2023, our board of directors declared a cash dividend on our common stock in the amount of $0.38 per share.

The dividend was paid on October 31, 2023 to stockholders of record as of the close of business on September 28, 2023.

On October 30, 2023, our board of directors declared a cash dividend on our common stock in the amount of $0.40 per share.

The dividend was paid on January 31, 2024 to stockholders of record as of the close of business on December 28, 2023.

On February 5, 2024, our board of directors declared a cash dividend on our common stock in the amount of $0.40 per share.

The dividend is payable on April 30, 2024 to stockholders of record as of the close of business on March 28, 2024.

We cannot assure you, however, that we will pay dividends in the future in the current amounts or at all.

1 unchanged sentence

Any future determination relating to our dividend policy will be dependent on a variety of factors, including our financial condition, earnings, legal requirements, our general liquidity needs, and other factors that our board of directors deems relevant.

Our ability to declare and pay dividends to our stockholders is subject to certain laws, regulations, and policies, including minimum capital requirements and, as a Delaware

corporation, we are subject to certain restrictions on dividends under the DGCL.

Our ability to declare and pay dividends to our stockholders is subject to certain laws, regulations, and policies, including minimum capital requirements and, as a Delaware corporation, we are subject to certain restrictions on dividends under the DGCL.

Under the DGCL, our board of directors may not authorize payment of a dividend unless it is either paid out of our surplus, as calculated in accordance with the DGCL, or if we do not have a surplus, it is paid out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.

Finally, our ability to pay dividends to our stockholders may be limited by covenants in any debt agreements that we are currently a party to, including our Revolving Credit Facility and the Senior Notes Indenture, or may enter into in the future.

As a consequence of these various limitations and restrictions, we may not be able to make, or may have to reduce or eliminate at any time, the payment of dividends on our common stock.

4 unchanged sentences

If interest rates increase and we are unable to effectively hedge our interest rate risk, our debt service obligations on the variable rate indebtedness would increase even if the amount borrowed remained the same, and our net income and cash available for servicing our indebtedness would decrease.

In June 2022, we amended and restated the existing credit agreement governing the Revolving Credit Facility to, among other things, replace LIBOR with SOFR.

After giving effect to the credit agreement amendment and restatement, any borrowings under our Revolving Credit Facility are primarily based on SOFR.

It is unknown whether SOFR will attain market acceptance as a replacement for LIBOR and, because SOFR differs fundamentally from LIBOR, there is no assurance that SOFR will perform in the same way as LIBOR would have performed at any time, and there is no guarantee that it is a comparable substitute for LIBOR.

As a result, we cannot reasonably predict the potential effect of the establishment of alternative reference rates on our business, financial condition or results of operations.

We may be able to incur substantially more debt.

This could further exacerbate the risks associated with our substantial indebtedness.

We may be able to incur substantial additional indebtedness in the future, subject to certain limitations, including under our Revolving Credit Facility, the Senior Notes and under any future debt agreements.

We may be able to incur substantial additional indebtedness in the future, subject to certain limitations, including under our Revolving Credit Facility, the Senior Notes Indentures and under any future debt agreements.

If new debt is added to our current debt levels, the related risks that we now face could increase.

11 unchanged sentences

The capped call transactions may affect the value of the Convertible Notes and our common stock.

In connection with the pricing of the Convertible Notes, we entered into privately negotiated capped call transactions relating to such notes with the option counterparties.

In connection with the pricing of our 3.625% convertible senior notes due 2029 (the “Convertible Notes”), we entered into privately negotiated capped call transactions relating to such notes with the option counterparties.

The capped call transactions relating to the Convertible Notes cover, subject to customary adjustments, the number of shares of our common stock that initially underlie such notes.

The capped call

transactions are expected generally to reduce the potential dilution to our common stock upon any conversion of the Convertible Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap.

The capped call transactions are expected generally to reduce the potential dilution to our common stock upon any conversion of the Convertible Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap.

The option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the Convertible Notes (and are likely to do so during any observation period related to a conversion of such notes).

10 unchanged sentences

Our exposure will depend on many factors but, generally, the increase in our exposure will be correlated with increases in the market price or the volatility of our common stock.

In addition, upon a default or other failure to perform, or a termination of obligations, by an option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock.

In addition, upon a default or other failure to perform, or a termination of obligations, by an option counterparty, we may

suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock.

We can provide no assurances as to the financial stability or viability of any option counterparty.

6 unchanged sentences

In addition, because we have the ability to settle the Convertible Notes, upon conversion, by paying or delivering cash equal to the principal amount of the obligation and common stock for amounts over the principal amount, the shares issuable upon conversion of the Convertible Notes are accounted for using the if-converted method and, as such, are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the Convertible Notes exceeds their principal amount.

Further, under the if-converted method, the dilutive shares are computed assuming the maximum dilutive

Further, under the if-converted method, the dilutive shares are computed assuming the maximum dilutive impact.

We cannot be sure that we will be able to continue to demonstrate the ability to settle the Convertible Notes in cash or that the accounting standards will continue to permit the use of the if-converted method.

4 unchanged sentences

In addition, even if holders do not elect to convert their Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

Provisions in the Convertible Notes Indenture (as defined below) could delay or prevent an otherwise beneficial takeover of us.

Certain provisions in the Convertible Notes Indenture could make a third-party attempt to acquire us more difficult or expensive.

Provisions in the indenture governing the Convertible Notes could delay or prevent an otherwise beneficial takeover of us.

Certain provisions in the indenture governing the Convertible Notes could make a third-party attempt to acquire us more difficult or expensive.

For example, if a takeover constitutes a fundamental change, then noteholders will have the right to require us to repurchase their notes for cash.

6 unchanged sentences

Department of the Interior (“DOI”) to temporarily pause new oil and gas leases on federal lands and waters pending completion of a comprehensive review of the federal government’s existing oil and gas leasing and permitting program.

In June 2021, a federal district court enjoined the DOI from implementing the pause and leasing resumed subject to certain limitations, although litigation over the leasing pause remains ongoing.

In June 2021, a federal district court enjoined the DOI from implementing the pause and leasing resumed subject to certain limitations.

In August 2022, the U.S.

Court of Appeals vacated and remanded the federal district court’s decision to block the pause on new oil and gas leasing, and the federal district court shortly thereafter enjoined the DOI from implementing the pause in the thirteen states that had challenged the pause.

Litigation over leasing remains ongoing.

Additionally, in July 2023, DOI announced a proposed rule to revise outdated fiscal terms of the onshore federal oil and gas leasing program, including for bonding requirements, royalty rates and minimum bids, with a final rule expected in April 2024.

As a result, it is difficult to predict if and when such areas may be made available for future exploration activities.

In addition, in November 2021, the EPA proposed a new rule that would impose more stringent methane emissions standards for new and modified sources in the oil and gas industry, and to regulate existing sources in the oil and gas industry for the first time.

On November 11, 2022, the EPA issued the proposed rule supplementing the November 2021 proposed rule.

In November, 2022, the EPA issued the proposed rule supplementing the November 2021 proposed rule.

Among other things, the November 2022 supplemental proposed rule removes an emissions monitoring exemption for small wellhead-only sites and creates a new third-party monitoring program to flag large emissions events, referred to in the proposed rule as “super emitters.” In December 2023, the EPA announced a final rule, which, among other things, requires the phase out of routine flaring of natural gas from newly constructed wells (with some exceptions) and routine leak monitoring at all well sites and compressor stations.

Further, in September 2021, President Biden publicly announced the Global Methane Pledge, an international pact that aims to reduce global methane emissions to at least 30% below 2020 levels by 2030.

20 unchanged sentences

The passage of any legislation as a result of these proposals or any similar changes in U.S.

federal income tax laws could eliminate or postpone certain tax deductions that currently are available with respect to oil and gas development or increase costs, and any such changes could have an adverse effect on our financial position, results of operations and cash flows.

federal income tax laws could

eliminate or postpone certain tax deductions that currently are available with respect to oil and gas development or increase costs, and any such changes could have an adverse effect on our financial position, results of operations and cash flows.

The enactment of new or increased severance taxes and impact fees on natural gas production could negatively impact our assets in the Marcellus Shale formation.

11 unchanged sentences

Outcomes from these audits could have an adverse effect on our financial condition and results of operations.

Changes to applicable tax laws and regulations may result in our incurring increased administrative and compliance costs and additional income tax liabilities, which could have an adverse effect on our business, results of operations and financial condition.

We are subject to various complex and evolving U.S.

federal and state income taxes.

federal, state and local tax laws, policies, statutes, rules, regulations or ordinances could be implemented, interpreted, changed, modified or applied adversely to us, in each case, possibly with retroactive effect.

For example, on August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into federal law.

The IRA introduced, among other things, a new Corporate Alternative Minimum Tax (“CAMT”) which is a minimum tax based on financial statement income that applies to “applicable corporations.” CAMT is effective for tax years beginning in 2023.

The Company is not subject to CAMT in 2023 but once we reach the applicable financial statement income thresholds, which we expect to occur no earlier than 2025, the CAMT rules could increase tax compliance complexity and uncertainty and result in additional administrative costs and income tax liabilities.

A new 1% U.S.

6 unchanged sentences

However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new share issuances against the fair market value of shares repurchases during the same taxable year.

In addition, certain

exceptions apply to the excise tax.

In addition, certain exceptions apply to the excise tax.

On December 27, 2022, the U.S.

53 unchanged sentences

Environmental legislation is evolving in a manner we expect may result in stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs.

The discharge of oil, natural gas or other

pollutants into the air, soil or water may give rise to liabilities to governments and third parties and may require us to incur costs to remedy such discharge, regardless of whether we were responsible for the release or contamination and regardless of whether our operating partners met previous standards in the industry at the time they were conducted.

The discharge of oil, natural gas or other pollutants into the air, soil or water may give rise to liabilities to governments and third parties and may require us to incur costs to remedy such discharge, regardless of whether we were responsible for the release or contamination and regardless of whether our operating partners met previous standards in the industry at the time they were conducted.

In addition, claims for damages to persons, property or natural resources may result from environmental and other impacts of operations on our properties.

15 unchanged sentences

Such regulatory initiatives could stimulate demand for alternative forms of energy that do not rely on combustion fossil fuels.

Legislation or regulations that may be adopted to address climate change could also affect the markets for our products by making our products more or less desirable than competing sources of energy.

To the extent that our products are competing with higher GHG emitting energy sources, our products would become more desirable in the market with more stringent limitations on GHG emissions.

To the extent that our products are competing with lower GHG emitting energy sources such as solar and wind, our products would become less desirable in the market with more stringent limitations on GHG emissions.

We cannot predict with any certainty at this time how these possibilities may affect our operations.

Any GHG emissions legislation or regulatory programs applicable to power plants or refineries could also increase the cost of consuming, and potentially reduce demand for, the oil and natural gas we produce.

1 unchanged sentence

Additionally, the SEC issued a proposed rule in March 2022 that would mandate extensive disclosure of climate-related data, risks and opportunities, including financial impacts, physical and transition risks, related governance and strategy, and GHG emissions, for certain public companies.

We cannot predict the costs of implementation or any potential adverse impacts resulting from the rulemaking.

In part because the proposed rule’s ultimate date of effectiveness and the final form and substance of these requirements is not yet known, we cannot predict the costs of implementation or any potential adverse impacts resulting from the rulemaking.

To the extent this rulemaking is finalized as proposed, we could incur increased costs relating to the assessment and disclosure of climate-related risks.

1 unchanged sentence

Business—Governmental Regulation and Environmental Matters” and “—Climate Change” for a further discussion of the laws and regulations related to GHGs and of climate change.

We have relied on an exception from the definition of “investment company” under the Investment Company Act of 1940, as amended, and the rules and regulations thereunder (the “ICA”) in order to avoid being subject to the ICA.

We have relied on an exception from the definition of “investment company” under the ICA in order to avoid being subject to the ICA.

To the extent the nature of our business or assets change in the future and we do not qualify for another

exemption or exception under the ICA at such time, we may be required to register as an “investment company” and become subject to regulations thereunder, which would limit our business operations and require us to spend significant resources in order to comply with such regulations.

To the extent a regulatory agency determines we do not qualify for exception to the ICA on which we currently rely, we may be deemed to have been in violation of the ICA, the consequences of which would be expected to be significant.

Risks Related to Our Common Stock

2 unchanged sentences

Any shares of common stock that we may issue in the future, including securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or substantially similar securities, may dilute the ownership interests of our stockholders.

In addition, future issuances of common stock under our 2018 Equity Incentive Plan or other equity incentive plans that we may adopt in the future, or in connection with an acquisition or otherwise, would also dilute the percentage ownership held by our stockholders.

In addition, future issuances of common stock under our Amended and Restated 2018 Equity Incentive Plan or other equity incentive plans that we may adopt in the future, or in connection with an acquisition or otherwise, would also dilute the percentage ownership held by our stockholders.

The market price of our common stock could decline as a result of sales or issuances of a large number of shares of our common stock or similar securities in the market or the perception that such sales or issuances could occur.

15 unchanged sentences

Investors may be forced to rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize a return on their investment.

Unresolved Staff Comments

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors