What changed in this filing

/stocks — the workspaceLOADING

Item 2. Properties

2025-02-20 compared with 2024-02-23 · 40 added, 36 removed, 277 unchanged (22% of the section changed)

17 unchanged sentences

Under SEC guidelines, these prices represent the average prices per barrel of oil and per Mcf of natural gas at the beginning of each month in the 12-month period prior to the end of the reporting period, after adjustment to reflect applicable transportation and quality differentials.

Estimated net proved reserves at December 31, 2023 were 339,694 MBoe, a 3% increase from estimated net proved reserves of 330,809 MBoe at December 31, 2022.

The increase was primarily due to the impact of our 2023 acquisitions, as well as higher activity levels in 2023 as compared to 2022.

Increased development activity in 2023 led to an increase in our capital spending as well as an increase in the number of undeveloped drilling locations reflected in our 2023 proved reserve estimates.

As a result of the higher activity levels and our 2023 acquisitions, the number of proved undeveloped wells included in the reserves was increased from 138.2 net wells in 2022 to 146.0 net wells in 2023.

Estimated net proved reserves at December 31, 2024 were 378,484 MBoe, an 11% increase from estimated net proved reserves of 339,694 MBoe at December 31, 2023.

The increase was primarily due to the impact of our 2024 acquisitions, as well as organic drilling activities in 2024.

As of December 31, 2024 and 2023, we had 146.4 and 146.0 net proved developed wells, respectively, included in our reserves.

The following table sets forth summary information by reserve category with respect to estimated proved reserves at December 31, 2024:

53 unchanged sentences

Our future development drilling program includes the drilling of approximately 146.4 proved undeveloped net wells before the end of 2029 at an estimated cost of $1.3 billion.

Our development plan for drilling proved undeveloped wells calls for the drilling of 90.9 net wells during 2024 (includes 55.8 net wells spud at December 31, 2023, but classified as proved undeveloped due to Cawley’s internal guidelines which require greater than 50% of total costs to be incurred to be classified as developed), 19.4 net wells during 2025, 18.7 net wells during 2026, 11.6 net wells during 2027, and 5.4 net wells during 2028 for a total of 146.0 net wells.

Our development plan for drilling proved undeveloped wells calls for the drilling of 71.7 net wells during 2025 (includes 30.1 net wells spud at December 31, 2024, but classified as proved undeveloped due to internal guidelines which require greater than 50% of total costs to be incurred to be classified as developed), 32.2 net wells during 2026, 23.9 net wells during 2027, 12.9 net wells during 2028, and 5.7 net wells during 2029 for a total of 146.4 net wells.

Our proved undeveloped locations were increased from 146.0 net wells at December 31, 2023 to 146.4 net wells at December 31, 2024 due to our 2024 acquisitions and increased development activity.

9 unchanged sentences

Proved developed property additions in 2024 also included 13.1 MMBoe from the conversion of previously undeveloped locations that were not booked in our December 31, 2023 proved undeveloped reserves (the related development costs incurred at December 31, 2024 were $175.7 million).

Additionally, our proved undeveloped reserves at December 31, 2023 included 58.6 MMBoe for net wells that had commenced drilling activities but remained classified as undeveloped reserves due to Cawley’s internal guidelines which require greater than 50% of the total costs to have been incurred in order to be classified as proved developed (the related development costs incurred at December 31, 2023 were $175.7 million).

Additionally, our proved undeveloped reserves at December 31, 2024 included 29.7 MMBoe for net wells that had commenced drilling activities but remained classified as undeveloped reserves due to more than half of the capital expenditures that remain to be incurred for completion of the wells (the related development costs incurred at December 31, 2024 were $101.7 million).

In 2024, we also added 22.7 MMBoe of proved undeveloped reserves as a result of our development activity.

1 unchanged sentence

The SEC-prescribed commodity prices (after adjustment for transportation, quality and basis differentials) were $4.91 lower per barrel of oil and $1.08 lower per Mcf of natural gas at year-end 2024 as compared to year-end 2023.

Additionally, we had negative revisions of 6.6 MMBoe primarily due to the aforementioned lower pricing.

We also removed 24.9 MMBoe of proved undeveloped reserves due to the SEC-prescribed 5-year rule.

Additionally, we had positive revisions of 15.4 MMBoe primarily due to continued development in already proven areas.

We also removed 11.7 MMBoe of proved undeveloped reserves primarily due to the SEC-prescribed 5-year rule.

Proved Reserves Sensitivity by Price Scenario

The SEC disclosure rules allow for optional reserves sensitivity analysis, such as the sensitivity that oil and natural gas reserves have to price fluctuations.

We have chosen to compare our proved reserves calculated using SEC Pricing (the “2023 SEC Case”) to one alternate pricing case, which uses a flat pricing deck of $70.00 per Bbl for oil and $3.00 per MMbtu for natural gas (the “$70 Flat Case”).

The sensitivity scenario was not audited by a third-party.

In this sensitivity scenario, all operating cost assumptions and other factors, other than the commodity price assumptions, have been held constant with the 2023 SEC Case.

However, the change in pricing in the sensitivity scenario did result in fewer future drilling locations that were economic at the $70 Flat Case compared to the 2023 SEC Case.

As a result, the $70 Flat Case included 7.9 fewer proved undeveloped net wells compared to the 146.0 proved undeveloped net wells included in the 2023 SEC Case.

This sensitivity is only meant to demonstrate the impact that changing commodity prices may have on estimated proved reserves and PV-10 and there is no assurance this outcome will be realized.

The table below shows our proved reserves utilizing the 2023 SEC Case compared with the $70 Flat Case.

We have chosen to compare our proved reserves calculated using SEC Pricing (the “2024 SEC Case”) to two alternate pricing cases.

The first case scenario uses a flat pricing deck of $80.00 per Bbl for oil and $4.00 per MMbtu for natural gas (the “$80 Flat Case”).

The second scenario uses a flat pricing deck of $60.00 per Bbl for oil and $3.00 per MMbtu for natural gas (the “$60 Flat Case”).

The sensitivity scenarios were not audited by a third-party.

In these sensitivity scenarios, all operating cost assumptions and other factors, other than the commodity price assumptions, have been held constant with the 2024 SEC Case.

The change in pricing in the $60 Flat Case resulted in fewer future drilling locations that were considered economic compared to the 2024 SEC Case.

This sensitivity analysis is only meant to demonstrate the impact that changing commodity prices may have on estimated proved reserves and PV-10 values.

There is no assurance that any particular outcome will be realized.

The table below shows our proved reserves utilizing the 2024 SEC Case compared with the $80 Flat Case and the $60 Flat Case.

2024 SEC Case (1)

$80 Flat Case (2)

$60 Flat Case (3)

Net Proved Reserves (December 31, 2024)

14 unchanged sentences

(2) Prices based on $80.00 per Bbl for oil and $4.00 per MMbtu for natural gas, which were then adjusted for transportation and quality differentials to arrive at prices of $75.10 per Bbl for oil and $3.88 per Mcf for natural gas.

(3) Prices based on $60.00 per Bbl for oil and $3.00 per MMbtu for natural gas, which were then adjusted for transportation and quality differentials to arrive at prices of $55.22 per Bbl for oil and $2.85 per Mcf for natural gas.

(4) Pre-tax PV10%, or PV-10, may be considered a non-GAAP financial measure.

37 unchanged sentences

Our executive internal reserve engineer has a B.S.

in petroleum engineering from Montana Tech, has over eighteen years of oil and gas experience on the reservoir side, and has experience working for large independents on projects and acquisitions.

in petroleum engineering from Montana Tech, has over nineteen years of oil and gas experience on the reservoir side, and has experience working for large independents on projects and acquisitions.

In addition, we utilize a third-party reservoir engineering firm as our independent reserves auditor for 100% of our reserves base.

21 unchanged sentences

Net Production:

Oil (Bbl) 22,012,986 16,090,072 12,288,358

Natural Gas and NGLs (Mcf) 84,341,858 68,829,142 44,073,941

Total (Boe) 36,069,962 27,561,596 19,634,015

Oil (Bbl) per day 60,310 44,082 33,667

Mcf per day 231,074 188,573 120,751

Total (Boe) per day 98,822 75,511 53,792

Oil (MBbl) 26,511 22,013 16,090

Natural Gas (MMcf) 113,476 84,342 68,829

Total (MBoe) 45,423 36,070 27,562

Oil (MBbl) per day 72 60 44

Natural Gas (MMcf) per day 310 231 189

Total (MBoe) per day 124 99 76

Average Sales Prices:

3 unchanged sentences

Natural Gas and NGLs (per Mcf) 2.24 2.98 7.43

Effect of Gain (Loss) on Settled Natural Gas Derivatives on Average Price (per Mcf) 0.92 (1.60) (0.92)

Natural Gas and NGLs Net of Settled Natural Gas Derivatives (per Mcf) 3.90 5.83 3.65

Effect of Gain on Settled Natural Gas Derivatives on Average Price (per Mcf) 0.76 0.92 (1.60)

Natural Gas and NGLs, Net of Settled Natural Gas and NGL Derivatives (per Mcf) 3.00 3.90 5.83

Realized Price on a Boe Basis Excluding Settled Commodity Derivatives 47.38 52.61 72.05

Effect of Gain (Loss) on Settled Commodity Derivatives on Average Price (per Boe) 1.61 (16.52) (6.37)

Effect of Gain on Settled Commodity Derivatives on Average Price (per Boe) 1.83 1.61 (16.52)

Realized Price on a Boe Basis Including Settled Commodity Derivatives 49.21 54.22 55.53

8 unchanged sentences

Appalachian Basin 56 — —

Uinta Basin 685 — —

Total 26,511 22,013 16,090

Natural Gas and NGLs (Mcf)

Natural Gas and NGLs (MMcf)

Williston Basin 31,518 31,103 27,028

1 unchanged sentence

Appalachian Basin 36,785 24,645 27,546

Uinta Basin 552 — —

Total 113,476 84,342 68,829

Crude Oil Equivalents (Boe)

Crude Oil Equivalents (MBoe)

Williston Basin 17,494 17,931 16,157

1 unchanged sentence

Appalachian Basin 6,186 4,108 4,591

Uinta Basin 777 — —

Total 45,423 36,070 27,562

6 unchanged sentences

Gross Net (1)

Exploratory Wells:

Oil — — — — — —

Natural Gas — — — — — —

Non-Productive — — — — — —

Development Wells:

2 unchanged sentences

Non-Productive — — — — — —

Total Productive Exploratory and Development Wells 819 76.6 557 56.8 362 35.8

Total Development Wells 819 90.7 819 76.6 557 56.8

______________

2 unchanged sentences

Wells are classified as oil or natural gas wells according to the predominant production stream.

All of our wells in the Williston and Permian Basins are classified as oil wells, although they also produce natural gas and condensate.

All of our wells in the Williston, Permian, and Uinta Basins are classified as oil wells, although they also produce natural gas and condensate.

All of our wells in the Appalachian Basin are classified as natural gas wells.

4 unchanged sentences

Appalachian Basin 424 104.3 397 100.3 367 98.5

Uinta Basin 271 37.4 — — — —

Total 10,868 1,108.0 9,765 951.6 8,672 799.3

8 unchanged sentences

Appalachian Basin 129,077 27,333 96,088 25,810 225,165 53,143

Uinta Basin 248,354 14,525 51,876 1,382 300,230 15,907

1,446,007 247,112 226,663 45,388 1,672,670 292,500

7 unchanged sentences

In those instances, we still review each lease on a lease-by-lease basis to ensure that the package as a whole meets our acquisition criteria and drilling expectations.

See Note 3 to our financial statements regarding our recent acquisition activity.

See Note 3 to our financial statements regarding our recent acquisition activities.

Acreage Expirations

15 unchanged sentences

We believe that the expired acreage was not material to our capital deployed.

As of December 31, 2023, we estimate that less than 1% of our proved undeveloped reserves were attributable to locations scheduled to be drilled after lease expiration.

As of December 31, 2024, we estimate that less th an 1% of our proved undeveloped reserves were attributable to locations scheduled to be drilled after lease expiration.

Unproved Properties

17 unchanged sentences

Delivery Commitments

For our properties in the Appalachian Basin, we have contractually agreed to deliver firm quantities of natural gas to certain third parties, which we seek to fulfill with production from existing reserves.

For our properties in the Appalachian Basin, we have contractually agreed to deliver firm quantities of natural gas to certain unaffiliated third parties, which we seek to fulfill with production from existing reserves.

In the event we are not able to meet these firm commitments, we are subject to deficiency payments.

6 unchanged sentences

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 2. Properties