What changed in this filing

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Item 2. Properties

2026-03-04 compared with 2025-03-05 · 90 added, 46 removed, 355 unchanged (28% of the section changed)

23 unchanged sentences

As of December 31, 2025, we owned interests in a total of 12,892 gross (8,833 net) developed acres and 8,370 gross (8,318 net) undeveloped acres with an average proved operated working interest of 92% and net revenue interest of 69%.

As of December 31, 2024, the Company had interests in approximately five gross vertical and 151 gross horizontal producing wells, of which we operate five vertical and 116 horizontal wells.

The horizontal wells predominately produce from the San Andres conventional reservoir and the verticals produce from Wolfcamp reservoir.

As of December 31, 2025, the Company had interests in approximately seven gross vertical and 136 gross horizontal producing wells, of which we operate seven vertical and 120 horizontal wells.

The horizontal wells predominately produce from the San Andres conventional reservoir and the vertical wells produce from the Wolfcamp reservoir.

Central Basin Platform – Andrews, Gaines, Crane, Ector, Winkler, and Ward Counties, Texas – In 2011, we acquired a 100% working interest and a 75% net revenue interest in our initial leases in Andrews County.

Since that time, we have acquired working and net revenue interests in additional producing leases and acquired additional undeveloped acreage in and around our Andrews County and Gaines County leases.

In 2022, we acquired properties consisting of approximately 37,000 net acres, with an average working interest of 99% and an average net revenue interest of 88% for oil and 96% for natural gas in our initial leases in Crane, Winkler, and Ward counties.

In 2022, we acquired properties consisting of

approximately 37,000 net acres, with an average working interest of 99% and an average net revenue interest of 88% for oil and 96% for natural gas in our initial leases in Crane, Winkler, and Ward counties.

In 2023, we acquired properties in Ector County.

1 unchanged sentence

As of December 31, 2025, the Company had interests in approximately 509 gross vertical and 267 gross horizontal producing wells, of which we operate 401 vertical and 265 horizontal wells.

The horizontal wells predominately produce from the San Andres conventional reservoir and the vertical wells produce from a variety of conventional pay sands including Holt, Glorieta, Clear Fork, Wichita Albany, Tubb, Wolfcamp and Devonian reservoirs .

The horizontal wells predominately produce from the San Andres conventional reservoir and the vertical wells produce from a variety of conventional pay zones including the Holt, Glorieta, Clear Fork, Wichita Albany, Tubb, Wolfcamp and Devonian reservoirs .

Title to Properties

6 unchanged sentences

Summary of Oil and Natural Gas Reserves

As of December 31, 2024, our estimated proved reserves had a pre-tax PV-10 value (present value discounted at 10%) of approximately $1,462.8 million and a Standardized Measure of Discounted Future Net Cash Flows of

approximately $1,232.9 million, over 99.7% of which relates to our properties in the Permian Basin in Texas.

As of December 31, 2025, our estimated proved reserves had a pre-tax PV-10 value (present value discounted at 10%) of approximately $1,318.2 million and a Standardized Measure of Discounted Future Net Cash Flows of approximately $1,123.5 million, over 99.8% of which relates to our properties in the Permian Basin in Texas.

We spent approximately $335.8 million on acquisitions and capital projects during 2025 and 2024.

1 unchanged sentence

The following table summarizes our total net proved reserves, pre-tax PV-10 value and Standardized Measure of Discounted Future Net Cash Flows as of December 31, 2025.

Approximately 99.8% of our proved reserves are in the Permian Basin in Texas.

(Bbl) Natural

8 unchanged sentences

See below for a reconciliation.

We present the pre-tax PV-10 value, which is a non-GAAP financial measure, because it is a widely used industry standard which we believe is useful to those who may review this Report when comparing our asset base and performance to other comparable oil and natural gas exploration and production companies.

We present the pre-tax PV-10 value, which is a non-GAAP financial measure, because it is a widely used industry standard which we believe is useful to those who may review this Annual Report when comparing our asset base and performance to other comparable oil and natural gas exploration and production companies.

PV-10 is a non-GAAP measure that differs from a measure under accounting principles generally accepted in the United States ("GAAP") known as “standardized measure of discounted future net cash flows” in that PV-10 is calculated without including future income taxes.

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("CGA"), independent petroleum engineers.

These reserves are

attributable solely to properties within the United States.

These reserves are attributable solely to properties within the United States.

A summary of the changes in quantities of proved (developed and undeveloped) oil, natural gas, and natural gas liquid reserves is shown below.

7 unchanged sentences

Revisions of previous quantity estimates (2)

(6,728,088) (9,946,459) (621,014) (9,006,845)

Balance, December 31, 2023 82,141,277 146,396,322 23,218,564 129,759,229

4 unchanged sentences

Revisions of previous quantity estimates (2)

(6,730,246) (730,235) 3,621,245 (3,230,707)

Balance, December 31, 2024 80,904,071 149,817,162 28,303,085 134,176,684

Purchase of minerals in place 9,915,483 10,067,543 2,373,336 13,966,743

Extensions, discoveries and improved recovery 7,281,553 10,624,783 2,133,786 11,186,136

Sales of minerals in place — — — —

Production (4,841,164) (6,980,958) (1,387,818) (7,392,476)

Revisions of previous quantity estimates (2)

(2,939,895) 12,652,046 2,171,955 1,340,734

Balance, December 31, 2025 90,320,048 176,180,576 33,594,344 153,277,821

(1) Six Mcf is deemed the equivalent of one Boe.

(2) At year-end 2022, we began reporting reserves on a three-stream basis, including NGLs separately from natural gas.

(2) Revisions represent changes in previous reserves estimates, either upward or downward, resulting from new information normally obtained from development drilling and production history, a rule that undeveloped reserves must be drilled within five years of originally being booked, and/or resulting from a change in economic factors, such as commodity prices, operating costs or development costs.

1 unchanged sentence

• Extensions.

In 2025, extensions of 11.2 MMBoe were primarily the result of 41 newly added PUDs in addition to an active leasing program.

Also impacting extensions were three successfully drilled wells in the Northwest Shelf and Central Basin Platform.

• Purchase of minerals in place.

In 2025, the Company completed the acquisition of Lime Rock oil and gas leases and related property within Andrews County, as well as a few other minor acquisitions, that resulted in 14.0 MMBoe of additional reserves.

• Sales of minerals in place.

In 2025, the Company did not sell any reserves.

• Revision of previous quantity estimates.

In 2025, the positive revisions of prior reserves of 1.3 MMBoe consisted of a positive 7.2 MMBoe related to changes in performance and other economic factors, offset by a negative 5.9 MMBoe related to changes in price (including differentials and gathering related contract change that effects differentials).

Notable changes in proved reserves for the year ended December 31, 2024 included the following:

• Extensions.

In 2024, extensions of 16.0 MMBoe were primarily the result of the successful operated drilling program in the Northwest Shelf and Central Basin Platform.

3 unchanged sentences

In 2024, the Company sold 1.2 MMBoe from the divestiture of certain oil and gas properties, including vertical wells and associated facilities, within the Central Basin Platform in Andrews and Gaines Counties.

• Revision of previous estimates.

• Revision of previous quantity estimates.

In 2024, the negative revisions of prior reserves of 3.2 MMBoe consisted of a positive 0.2 MMBoe related to changes in price (including differentials and gathering related contract change that effects differentials), offset by a negative 3.4 MMBoe related to changes in performance and other economic factors.

Notable changes in proved reserves for the year ended December 31, 2023 included the following:

• Extensions.

In 2023, extensions of 4.8 MMBoe were primarily the result of the successful operated drilling program and non-operated activity in the Northwest Shelf and Central Basin Platform.

• Purchase of minerals in place.

In 2023, the Company completed the acquisition of Founders oil and gas leases and related property within Ector County that resulted in 8.2 MMBoe in additional reserves.

• Sales of minerals in place.

In 2023, the Company sold 5.7 MMBoe from the divestiture of the Delaware Basin assets (30%), the New Mexico operated assets (57%), and part of the Company's assets in Gaines County (13%).

• Revision of previous quantity estimates.

In 2023, the negative revisions of prior reserves of 9.0 MMBoe consisted of 5.3 MMBoe (59%) related to changes in price and 3.7 MMBoe (41%) related to changes in performance and other economic factors.

Our proved oil, natural gas, and natural gas liquid reserves are shown below.

For the years ended December 31,

As of December 31,

2025 2024 2023

Developed 60,108,129 56,106,714 56,029,039

23 unchanged sentences

As of December 31, 2024, our reserves were based on an SEC average price of $71.96 per Bbl of WTI oil posted and $2.130 per MMBtu Henry Hub natural gas.

As of December 31, 2023, our reserves were based on an SEC average price of $74.70 per Bbl of WTI oil posted and $2.637 per MMBtu of Henry Hub natural gas.

Prices are adjusted by local field and lease level differentials and are held constant for life of reserves in accordance with SEC guidelines.

63 unchanged sentences

During the year ended December 31, 2025, we incurred costs of approximately $26.8 million to convert 14 properties from PUD to PD through development.

These 33 properties produced 893 MBoe during the year ended December 31, 2024, and have reserves of 6,538 MBoe as of December 31, 2024.

These 14 properties produced 596 MBoe during the year ended December 31, 2025, and have reserves of 3.9 MMBoe as of December 31, 2025.

• Extensions.

1 unchanged sentence

• Purchase of minerals in place.

• Sales of minerals in place.

In 2025, we did not sell any PUD reserves.

• Revision of previous estimates.

In 2025, the negative revisions of prior reserves of 1.4 MMBoe consisted of a negative 3.1 MMBoe related to changes in price (including differentials and gathering related contract change that effects differentials) offset by a positive 1.7 MMBoe related to changes in performance and other economic factors.

Notable changes in proved undeveloped reserves for the year ended December 31, 2024 included the following:

• Conversions to developed.

During the year ended December 31, 2024, we incurred costs of approximately $64.7 million to convert 33 properties from PUD to PD through development.

These 33 properties produced 893 MBoe during the year ended December 31, 2024, and had reserves of 6.5 MMBoe as of December 31, 2024.

• Extensions.

In 2024, extensions of 12.8 MMBoe were primarily the result of the successful operated drilling program in the Northwest Shelf and Central Basin Platform.

• Purchase of minerals in place.

In 2024, we did not purchase any additional reserves.

3 unchanged sentences

In 2024, the negative revisions of prior reserves of 5.6 MMBoe consisted of a positive 0.2 MMBoe related to changes in price (including differentials and gathering related contract change that effects differentials) offset by a negative 5.8 MMBoe related to changes in performance and other economic factors.

Notable changes in proved undeveloped reserves for the year ended December 31, 2023 included the following:

• Conversions to developed.

During the year ended December 31, 2023, we incurred costs of approximately $90.3 million to convert 27 properties from PUD to PD through development.

These 27 properties produced 573 MBoe during the year ended December 31, 2023, and had reserves of 7.1 MMBoe as of December 31, 2023.

• Extensions.

In 2023, extensions of 3.7 MMBoe were primarily the result of the successful operated drilling program and non-operated activity in the Northwest Shelf and Central Basin Platform.

• Purchase of minerals in place.

In 2023, we completed the acquisition of Founders oil and gas leases and related property within Ector county that resulted in 3.7 MMBoe in additional reserves.

• Sales of minerals in place.

In 2023, we sold 1.3 MMBoe from the divestiture of the New Mexico operated assets (81%), and a subset of our assets in Gaines County (19%).

• Revision of previous estimates.

In 2023, the negative revisions of prior reserves of 4.9 MMBoe consisted of 0.8 MMBoe (16%) related to changes in price and 4.1 MMBoe (84%) related to changes in performance and other economic factors.

The following table indicates projected reserves that we currently estimate will be converted from proved undeveloped to proved developed, as well as the estimated costs per year involved in such development.

11 unchanged sentences

2029 5,301,611 8,685,033 1,790,814 8,539,931 80,044,552

Other Future Years (2)

30,211,919 54,756,570 10,140,860 49,478,875 $ 438,492,384

(1) Estimated Development Costs include future asset retirement costs.

(2) Other Future Years costs include artificial lift conversions, asset retirement obligations and other capital required for the development of these wells.

Preparation and Internal Controls Over Reserves Estimates

All the proved oil and natural gas reserves disclosed in this Report are based on reserve estimates determined and prepared by our independent reserve engineers, Cawley, Gillespie & Associates, Inc.

All the proved oil and natural gas reserves disclosed in this Annual Report are based on reserve estimates determined and prepared by our independent reserve engineers, Cawley, Gillespie & Associates, Inc.

(“CGA”), a leader of petroleum property analysis for industry and financial institutions.

10 unchanged sentences

To establish reasonable certainty with respect to our estimated proved reserves, the independent reserve engineers employed technologies that have been demonstrated to yield results with consistency and repeatability.

Reserves attributable to producing wells with limited production history and for undeveloped locations were estimated using volumetric estimates or performance from analogous wells in the surrounding area.

Reserves attributable to producing wells with limited production history and for undeveloped locations were estimated using performance from analogous wells in the surrounding area.

These wells were considered to be analogous based on production performance from the same formation and completions using similar techniques.

The technologies and economic data used to estimate our proved reserves include, but are not limited to, well logs, geological maps, seismic data, well test data, production data, historical price and cost information, and property

ownership interests.

This data was reviewed by various levels of our management for accuracy before consultation with our independent reserve engineers.

The technologies and economic data used to estimate our proved reserves include, but are not limited to, production data, historical price and cost information, and property ownership interests, and, to a lesser extent, geological maps, well logs, seismic data, and well test data.

This data was reviewed by various levels of our management for completeness and accuracy before consultation with our independent reserve engineers.

This consultation included review of properties, assumptions, and available data.

5 unchanged sentences

• the judgment of the personnel preparing the estimates.

Our Executive Vice President of Engineering and Corporate Strategy, Mr.

Our Executive Vice President and Chief Operations Officer, Mr.

Alex Dyes, is the technical professional primarily responsible for overseeing the preparation of our reserves estimates.

8 unchanged sentences

• utilizing experienced reservoir engineers or those under their direct supervision to prepare reserve estimates.

Each quarter, the Corporate Reserves team along with the Executive Vice President of Engineering and Corporate Strategy presents the status of the Company’s reserves to senior executives, and subsequently obtains approval of significant changes from key executives.

Each quarter, the Corporate Reserves team along with the Executive Vice President and Chief Operations Officer presents the status of the Company’s reserves to senior executives, and subsequently obtains approval of significant changes from key executives.

Additionally, our five-year PUD development plan is reviewed and approved annually by the Company’s Chief Executive Officer;

Chief Financial Officer;

Executive Vice President of Engineering and Corporate Strategy;

Vice President of Operations;

Executive Vice President, Exploration and Geosciences;

and Vice President, General Counsel.

Vice President and Interim Chief Financial Officer;

Executive Vice President and Chief Operations Officer;

Senior Vice President of Operations;

Executive Vice President and Chief Exploration Officer;

and Senior Vice President, General Counsel.

The Corporate Reserves department works closely with independent reserve engineers from CGA at each fiscal year end to ensure the integrity, accuracy, and timeliness of annual independent reserves estimates.

These independently developed reserves estimates are presented to the Audit Committee.

In addition to reviewing the independently developed reserve reports, the Audit Committee also meets with CGA annually at a minimum.

These independently developed reserves estimates are presented to the Audit Committee, and the Audit Committee also meets with CGA annually at a minimum.

Summary of Oil and Natural Gas Properties and Projects

22 unchanged sentences

Delaware Basin (1)

— 25,743 81,936

Northwest Shelf 1,867,113 2,009,840 2,207,131

3 unchanged sentences

Delaware Basin (1)

— 11,265 96,516

Northwest Shelf 3,155,043 2,615,021 2,387,786

3 unchanged sentences

Delaware Basin (1)

— 2,867 3,718

Northwest Shelf 640,291 509,020 270,167

3 unchanged sentences

Delaware Basin (1)

— 30,488 101,740

Northwest Shelf 3,033,245 2,954,697 2,875,262

5 unchanged sentences

Total 20,253 19,648 18,119

(1) Due to our acquisition of Stronghold's assets, which reported its volumes and revenues on a three-stream basis, beginning July 1, 2022, we began reporting volumes and revenues on a three-stream basis, separately reporting crude oil, natural gas, and NGL sales.

For periods prior to July 1, 2022, sales and reserve volumes, prices, and revenues for NGLs were presented with natural gas.

(1) The Delaware Basin assets were sold with a closing date of May 11, 2023 and an effective date of March 1, 2023.

12 unchanged sentences

$ 41.55 $ 50.94 $ 54.60

For periods prior to July 1, 2022, sales and reserve volumes, prices, and revenues for NGLs were presented with natural gas.

Years ended December 31,

12 unchanged sentences

(1) In accordance with the IRA, the EPA implemented a waste emission charge ("WEC") on methane emitted from applicable oil and gas facilities that exceed certain thresholds.

The methane charge became effective in 2024 at $900 per metric ton of methane, and is set to increase to $1,200 per metric ton of methane for 2025, and $1,500 per metric ton of methane by 2026 and thereafter.

The methane charge became effective in 2024 at $900 per metric ton of methane, and was set to increase to $1,200 per metric ton of methane for 2025, and $1,500 per metric ton of methane by 2026 and thereafter.

For the year ended December 31, 2024, we accrued for $527,687 in methane taxes within Ad valorem taxes in our Statements of Operations.

As the WEC was repealed by Congress on March 14, 2025, we reversed the methane tax accrual in the first quarter of 2025.

The average oil sales price amounts above are calculated by dividing revenue from oil sales by the volume of oil sold, in Bbls.

11 unchanged sentences

During 2025, as operator, we drilled a total of 18.00 gross (17.00 net) wells.

Of this, 5.00 gross (4.94 net) horizontal San Andres wells were in the Northwest Shelf in Yoakum County (four 1.0-mile laterals and one 1.5-mile lateral) and 39.00 gross (39.00 net) wells were in the Central Basin Platform, of which seventeen were horizontal San Andres wells in Andrews County and Crane County, Texas (all 1.0-mile laterals) and 22.00 were vertical wells in Crane County, and Ector County, Texas.

These wells were successful and there were no dry wells (1) .

Of this, 5.00 gross (4.00 net) horizontal San Andres wells were in the Northwest Shelf in Yoakum County (three 1.0-mile laterals, one 1.25-mile lateral, and one 1.5-mile lateral) and 13.00 gross (13.00 net) wells were in the Central Basin Platform, of which 7.00 were horizontal wells in Andrews County and Crane County, Texas (all 1.0-mile laterals,) and 6.00 were vertical wells in Crane County, and Ector County, Texas.

All wells were successful producing oil and gas in commercial quantities.

The table below contains information regarding the number of operated wells drilled and/or participated in during the periods indicated.

For the year ended December 31,

For the years ended December 31,

2025 2024 2023

7 unchanged sentences

Dry — — — — — —

(1) One of the 44.00 drilled wells has been drilled but not yet completed as of December 31, 2024.

(1) One of the 44.00 drilled wells was drilled but not yet completed as of December 31, 2024.

The table below contains information regarding the number of non-operated wells drilled and participated in during the periods indicated.

For the year ended December 31,

For the years ended December 31,

2025 2024 2023

7 unchanged sentences

Present Activities

We had one operated well waiting on completion as of December 31, 2024.

We had no wells in the process of being drilled or completed as of December 31, 2025.

Cost Information

We conduct our oil and natural gas activities entirely in the United States.

As can be calculated from the table under “Production Prices and Production Costs”, our average production costs including lease operating expenses, gathering, transportation and transportation ("GTP") and ad valorem, per Boe, were $12.08 and $11.70 for the years ended December 31, 2024 and 2023, respectively.

As shown in the aforementioned table, our average production taxes, per Boe,

were $2.24 and $2.74 for the years ended December 31, 2024 and 2023, respectively.

As can be calculated from the table under “Production Prices and Production Costs”, our average production costs including lease operating expenses, gathering, transportation and processing ("GTP") and ad valorem, per Boe, were $11.88, $12.08, and $11.70 for the years ended December 31, 2025, 2024, and 2023 respectively.

As shown in the aforementioned table, our average production taxes, per Boe, were $1.94, $2.24, and $2.74 for the years ended December 31, 2025, 2024, and 2023 respectively.

These amounts are calculated by dividing our total production costs or total production taxes by our total volume sold, in Boe.

12 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