What changed in this filing

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Item 1. Financial Statements

2024-11-01 compared with 2024-08-08 · 201 added, 122 removed, 500 unchanged (39% of the section changed)

3 unchanged sentences

(in thousands, except share data)

September 30,

2024 December 31,

50 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2024 2023 2024 2023

1 unchanged sentence

Oil, gas, and NGL production revenue $ 642,380 $ 639,699 $ 1,835,427 $ 1,757,032

Other operating income 1,104 4,199 1,378 6,926

Other operating income, net 1,233 1,202 2,611 8,128

Total operating revenues and other income 643,613 640,901 1,838,038 1,765,160

12 unchanged sentences

Income before income taxes 297,650 176,364 724,801 622,388

Income tax expense ( 53,590 ) ( 42,092 ) ( 85,659 ) ( 97,598 )

Income tax (expense) benefit ( 57,127 ) 45,979 ( 142,786 ) ( 51,619 )

Net income $ 240,523 $ 222,343 $ 582,015 $ 570,769

9 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2024 2023 2024 2023

28 unchanged sentences

Balances, June 30, 2024 114,068,885 $ 1,141 $ 1,492,859 $ 2,352,532 $ ( 2,592 ) $ 3,843,940

Net income — — — 240,523 — 240,523

Other comprehensive income — — — — 108 108

Net cash dividends declared, $ 0.20 per share

— — — ( 22,947 ) — ( 22,947 )

Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings 349,528 3 ( 6,819 ) — — ( 6,816 )

Stock-based compensation expense — — 6,587 — — 6,587

Purchase of shares under Stock Repurchase Program — — 151 — — 151

Balances, September 30, 2024 114,418,413 $ 1,144 $ 1,492,778 $ 2,570,108 $ ( 2,484 ) $ 4,061,546

The accompanying notes are an integral part of these condensed consolidated financial statements.

SM ENERGY COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (Continued)

(in thousands, except share data and dividends per share)

Additional Paid-in Capital Accumulated Other Comprehensive Loss Total Stockholders’ Equity

19 unchanged sentences

Balances, June 30, 2023 118,112,105 $ 1,181 $ 1,680,080 $ 1,621,202 $ ( 3,996 ) $ 3,298,467

Net income — — — 222,343 — 222,343

Other comprehensive income — — — — 14 14

Net cash dividends declared, $ 0.15 per share

— — — ( 17,543 ) — ( 17,543 )

Issuance of common stock under Employee Stock Purchase Plan ( 18 ) — — — — —

Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings 553,442 6 ( 7,881 ) — — ( 7,875 )

Stock-based compensation expense — — 6,038 — — 6,038

Purchase of shares under Stock Repurchase Program ( 2,351,642 ) ( 24 ) ( 97,127 ) — — ( 97,151 )

Balances, September 30, 2023 116,313,887 $ 1,163 $ 1,581,110 $ 1,826,002 $ ( 3,982 ) $ 3,404,293

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash flows from operating activities:

16 unchanged sentences

Cash flows from financing activities:

Debt issuance costs related to credit facility ( 2,378 ) —

Net proceeds from Senior Notes 1,477,032 —

Cash paid to repurchase Senior Notes ( 349,118 ) —

Repurchase of common stock ( 83,991 ) ( 205,246 )

2 unchanged sentences

Net share settlement from issuance of stock awards ( 6,837 ) ( 7,882 )

Net cash used in financing activities ( 123,710 ) ( 143,422 )

Net cash provided by (used in) financing activities 974,416 ( 265,480 )

Net change in cash, cash equivalents, and restricted cash 1,221,149 ( 43,018 )

1 unchanged sentence

Cash, cash equivalents, and restricted cash at end of period $ 1,837,313 $ 401,980

Supplemental schedule of additional cash flow information:

The accompanying notes are an integral part of these condensed consolidated financial statements.

SM ENERGY COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

(in thousands)

For the Nine Months Ended September 30,

Supplemental schedule of additional cash flow information and non-cash activities:

Operating activities:

Cash paid for interest, net of capitalized interest (1)

$ ( 83,130 ) $ ( 77,514 )

Net cash paid for income taxes $ ( 7,623 ) $ ( 6,176 )

1 unchanged sentence

Changes in capital expenditure accruals $ ( 33,187 ) $ 35,683

Non-cash financing activities (2)

Reconciliation of cash, cash equivalents, and restricted cash:

3 unchanged sentences

____________________________________________

(1) Represents a deposit held in a third-party escrow account related to the XCL Acquisition, as defined in Note 11 - Acquisitions, and is included in the acquisition deposit held in escrow line item on the accompanying unaudited condensed consolidated balance sheets (“accompanying balance sheets”).

(1) Cash paid for interest, net of capitalized interest during the nine months ended September 30, 2024, does not include $ 9.0 million in fees paid to secure firm commitments for senior unsecured bridge term loans in connection with the Uinta Basin Acquisition discussed and defined in Note 11 - Acquisitions .

(2) Please refer to Note 5 - Long-Term Debt for discussion of the debt transactions executed during the nine months ended September 30, 2024.

(3) Represents a deposit held in a third-party escrow account related to the Uinta Basin Acquisition, as defined in Note 11 - Acquisitions, and is included in the acquisition deposit held in escrow line item on the accompanying unaudited condensed consolidated balance sheets (“accompanying balance sheets”).

Please refer to Note 11 - Acquisitions for additional discussion.

4 unchanged sentences

Description of Operations

SM Energy Company, together with its consolidated subsidiaries (“SM Energy” or the “Company”), is an independent energy company engaged in the acquisition, exploration, development, and production of oil, gas, and NGLs in the state of Texas, and upon the closing of the XCL Acquisition, in the state of Utah.

Please refer to Note 11 - Acquisitions for discussion and definitions related to the XCL Acquisition.

SM Energy Company, together with its consolidated subsidiaries (“SM Energy” or the “Company”), is an independent energy company engaged in the acquisition, exploration, development, and production of oil, gas, and NGLs in the state of Texas, and following the closing of the Uinta Basin Acquisition on October 1, 2024, in the state of Utah.

Please refer to Note 11 - Acquisitions for discussion and the definition of the Uinta Basin Acquisition.

Basis of Presentation

4 unchanged sentences

Operating results for the periods presented are not necessarily indicative of expected results for the full year.

In connection with the preparation of the Company’s unaudited condensed consolidated financial statements, the Company evaluated events subsequent to the balance sheet date of June 30, 2024, and through the filing of this report.

In connection with the preparation of the Company’s unaudited condensed consolidated financial statements, the Company evaluated events subsequent to the balance sheet date of September 30, 2024, and through the filing of this report.

Additionally, certain prior period amounts have been reclassified to conform to current period presentation in the accompanying unaudited condensed consolidated financial statements.

15 unchanged sentences

Improvements to Income Tax Disclosures (“ASU 2023-09”) .

ASU 2023-09 was issued to improve the disclosures related to rate reconciliations and income taxes paid.

ASU 2023-09 was issued to improve the disclosures primarily related to rate reconciliations and income taxes paid.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

8 unchanged sentences

The Company is currently evaluating the potential impact of the final rules on its financial statements and related disclosures.

As of June 30, 2024, and through the filing of this report, no other accounting guidance has been issued and not yet adopted that is applicable to the Company and that would have a material effect on the Company’s unaudited condensed consolidated financial statements and related disclosures.

As of September 30, 2024, and through the filing of this report, no other accounting guidance has been issued and not yet adopted that is applicable to the Company and that would have a material effect on the Company’s unaudited condensed consolidated financial statements and related disclosures.

Note 2 - Revenue from Contracts with Customers

4 unchanged sentences

Three Months Ended

June 30, Three Months Ended

September 30, Three Months Ended

September 30,

2024 2023 2024 2023 2024 2023

6 unchanged sentences

Midland Basin South Texas Total

Six Months Ended

June 30, Six Months Ended

Nine Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023 2024 2023

13 unchanged sentences

Estimated revenue due to the Company is recorded within the accounts receivable line item on the accompanying balance sheets until payment is received.

The accounts receivable balances from contracts with customers within the accompanying balance sheets as of June 30, 2024, and December 31, 2023, were $ 198.2 million and $ 175.3 million, respectively.

The accounts receivable balances from contracts with customers within the accompanying balance sheets as of September 30, 2024, and December 31, 2023, were $ 173.1 million and $ 175.3 million, respectively.

To estimate accounts receivable from contracts with customers, the Company uses knowledge of its properties, historical performance, contractual arrangements, index pricing, quality and transportation differentials, and other factors as the basis for these estimates.

9 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2024 2023 2024 2023

10 unchanged sentences

(3) Amounts may not calculate due to rounding.

As of June 30, 2024, following the re-authorization of our existing Stock Repurchase Program, $ 500.0 million was available for repurchases of the Company’s outstanding common stock through December 31, 2027 , under the Stock Repurchase Program.

During the second quarter of 2024, the Company’s Board of Directors approved an increase to the Company’s fixed dividend policy to $ 0.80 per share annually, to be paid in quarterly increments of $ 0.20 per share, beginning in the fourth quarter of 2024.

As of September 30, 2024, $ 500.0 million remained available for repurchases of the Company’s outstanding common stock through December 31, 2027 , under the Stock Repurchase Program.

Note 4 - Income Taxes

1 unchanged sentence

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2024 2023 2024 2023

(in thousands)

Current portion of income tax (expense) benefit:

Current portion of income tax expense:

Federal $ ( 10,201 ) $ ( 3,923 ) $ ( 23,675 ) $ ( 6,732 )

State ( 1,311 ) ( 1,173 ) ( 2,589 ) ( 1,716 )

Deferred portion of income tax expense ( 43,516 ) ( 44,278 ) ( 70,907 ) ( 94,246 )

Income tax expense $ ( 53,590 ) $ ( 42,092 ) $ ( 85,659 ) $ ( 97,598 )

Deferred portion of income tax (expense) benefit ( 45,615 ) 51,075 ( 116,522 ) ( 43,171 )

Income tax (expense) benefit $ ( 57,127 ) $ 45,979 $ ( 142,786 ) $ ( 51,619 )

Effective tax rate 19.2 % ( 26.1 ) % 19.7 % 8.3 %

2 unchanged sentences

The quarterly effective tax rate and the resulting income tax expense or benefit can also be affected by the proportional effects of forecast net income or loss and the correlative effect on the valuation allowance for each of the periods presented in the table above.

The Company completed a multi-year research and development (“R&D”) credit study in 2023, which resulted in a favorable adjustment to the Company’s effective tax rate for the three and six months ended June 30, 2024, compared with the same periods in 2023, and a reduction of the Company’s tax obligation.

Favorable adjustments to the Company’s effective tax rate are expected to continue in 2024 resulting from qualifying R&D activity and anticipated credit claims.

The effective tax rates for the three and nine months ended September 30, 2024, reflect the benefit of current R&D credits claimed.

The Company expects favorable adjustments to the Company’s effective tax rate to continue in the fourth quarter of 2024 resulting from qualifying R&D activity and anticipated credit claims.

The Company complies with authoritative accounting guidance regarding uncertain tax positions.

4 unchanged sentences

Credit Agreement

The Company’s Credit Agreement provides for a senior secured revolving credit facility with a maximum loan amount of $ 3.0 billion.

As of June 30, 2024, the borrowing base and aggregate lender commitments under the Credit Agreement were $ 2.5 billion and $ 1.25 billion, respectively.

The next scheduled borrowing base redetermination date is October 1, 2024.

The Credit Agreement is scheduled to mature on the earlier of (a) August 2, 2027 (“Stated Maturity Date”), or (b) 91 days prior to the maturity date of any of the Company’s outstanding Senior Notes, as defined below, to the extent that, on or before such date, the respective Senior Notes have not been repaid, exchanged, repurchased, refinanced, or otherwise redeemed in full, and, if refinanced or exchanged, with a scheduled maturity date that is not earlier than at least 180 days after the Stated Maturity Date.

On July 2, 2024, the Company entered into the First Amendment to the Credit Agreement (“First Amendment”) with its lenders.

The First Amendment amended certain provisions of the Credit Agreement in order to facilitate financing for the pending XCL Acquisition, as defined in Note 11 - Acquisitions .

On July 8, 2024, the Company, certain lenders under the revolving credit facility, and Wells Fargo Bank, National Association, administrative agent and swingline lender, began the process of seeking a second amendment to the Company’s Credit Agreement to, among other amendments, increase the revolving commitments available under the Credit Agreement from $ 1.25 billion to $ 2.0 billion and to extend the maturity of the Credit Agreement to five years beyond the effective date of such amendment.

There can be no assurance that the second amendment to the Credit Agreement, including increases to the commitments or extension of the maturity date, will be obtained.

Interest and commitment fees associated with the revolving credit facility are accrued based on a borrowing base utilization grid set forth in the Credit Agreement, as presented in Note 5 - Long-Term Debt in the 2023 Form 10-K .

At the Company’s election, borrowings under the Credit Agreement may be in the form of Secured Overnight Financing Rate (“SOFR”), Alternate Base Rate (“ABR”), or Swingline loans.

SOFR loans accrue interest at SOFR plus the applicable margin from the utilization grid, and ABR and Swingline loans accrue interest at a market-based floating rate, plus the applicable margin from the utilization grid.

Commitment fees are accrued on the unused portion of the aggregate lender commitment amount at rates from the utilization grid.

The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Agreement as of July 31, 2024, June 30, 2024, and December 31, 2023:

As of July 31, 2024 As of June 30, 2024 As of December 31, 2023

The Company’s Credit Agreement provides for a senior secured revolving credit facility with a maximum loan amount of $ 3.0 billion, and as of September 30, 2024, the borrowing base and aggregate lender commitments under the Credit Agreement were $ 2.5 billion and $ 1.25 billion, respectively.

Prior to the Second Amendment, as defined and discussed below, commitment fees on the unused portion of the aggregate lender commitment amount were accrued at rates from the borrowing base utilization grid set forth in the Credit Agreement, as presented in Note 5 - Long-Term Debt in the 2023 Form 10-K .

The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Agreement as of September 30, 2024, and December 31, 2023:

As of September 30, 2024 As of December 31, 2023

(in thousands)

1 unchanged sentence

Letters of credit (2)

2,500 2,500 2,500

Available borrowing capacity 1,248,000 1,247,500

1 unchanged sentence

____________________________________________

(1) Unamortized deferred financing costs attributable to the revolving credit facility are presented as a component of the other noncurrent assets line item on the accompanying balance sheets and totaled $ 7.3 million and $ 8.5 million as of June 30, 2024, and December 31, 2023, respectively.

(1) Unamortized deferred financing costs attributable to the revolving credit facility are presented as a component of the other noncurrent assets line item on the accompanying balance sheets and totaled $ 8.9 million and $ 8.5 million as of September 30, 2024, and December 31, 2023, respectively.

These costs are being amortized over the term of the revolving credit facility on a straight-line basis.

(2) Letters of credit outstanding reduce the amount available under the revolving credit facility on a dollar-for-dollar basis.

The Company’s Senior Notes, net line item on the accompanying balance sheets as of June 30, 2024, and December 31, 2023, consisted of the following (collectively referred to as “Senior Notes”):

As of June 30, 2024 As of December 31, 2023

First Amendment .

On July 2, 2024, the Company and its lenders entered into the First Amendment to the Credit Agreement (“First Amendment”) to amend certain provisions of the Credit Agreement to facilitate financing for the Uinta Basin Acquisition, as defined in Note 11 - Acquisitions .

Second Amendment .

On October 1, 2024, the Company and its lenders entered into the Second Amendment to the Credit Agreement (“Second Amendment”) in conjunction with the closing of the Uinta Basin Acquisition, as defined in Note 11 - Acquisitions, to, among other things:

(i) increase the aggregate revolving lender commitments available under the Credit Agreement from $ 1.25 billion to $ 2.0 billion;

(ii) extend the maturity date of the Credit Agreement;

and (iii) modify certain other provisions reflective of the increased aggregate revolving lender commitments, increased Company size and scale, and extended maturity date.

The Credit Agreement is scheduled to mature on the earlier of (a) October 1, 2029 (“Stated Maturity Date”), or (b) 91 days prior to the maturity date of any of the Company’s outstanding Senior Notes, as defined below, to the extent that, on or before such date, the respective Senior Notes in an amount exceeding $ 50.0 million have not been repaid, exchanged, repurchased, refinanced, or otherwise redeemed in full, and, if refinanced or exchanged, with a scheduled maturity date that is not earlier than at least 180 days after the Stated Maturity Date.

Under the Second Amendment, interest and commitment fees associated with the revolving credit facility are accrued based on a total revolving commitments utilization grid set forth in the Second Amendment, and as presented in the table below.

At the Company’s election, borrowings under the Credit Agreement may be in the form of Secured Overnight Financing Rate (“SOFR”) revolving loans, Alternate Base Rate (“ABR”) revolving loans, or Swingline loans.

SOFR revolving loans accrue interest at SOFR plus the applicable margin from the utilization grid, and ABR revolving loans and Swingline loans accrue interest at a market-based floating rate, plus the applicable margin from the utilization grid.

Commitment fees are accrued on the unused portion of the aggregate revolving lender commitment amount at rates from the utilization grid.

Total Revolving Commitments Utilization Percentage

<25% ≥25% <50% ≥50% <75% ≥75% <90% ≥90%

SOFR Revolving Loans

1.750 % 2.000 % 2.250 % 2.500 % 2.750 %

ABR Revolving Loans or Swingline Loans

0.750 % 1.000 % 1.250 % 1.500 % 1.750 %

Commitment Fee Rate 0.375 % 0.375 % 0.500 % 0.500 % 0.500 %

The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Agreement as of October 24, 2024:

As of October 24, 2024

(in thousands)

Revolving credit facility

Letters of credit (1)

Available borrowing capacity 1,839,000

Total aggregate lender revolving commitment amount

____________________________________________

(1) Letters of credit outstanding reduce the amount available under the revolving credit facility on a dollar-for-dollar basis.

On October 11, 2024, the Company’s lenders completed the semi-annual borrowing base redetermination, which resulted in an increase to the Company’s borrowing base to $ 3.0 billion and reaffirmed the aggregate revolving lender commitment at the existing amount of $ 2.0 billion.

The next borrowing base redetermination date is scheduled to occur on April 1, 2025.

The Company’s Senior Notes, net line item on the accompanying balance sheets as of September 30, 2024, and December 31, 2023, consisted of the following (collectively referred to as “Senior Notes”):

As of September 30, 2024 As of December 31, 2023

Principal Amount Unamortized Deferred Financing Costs Principal Amount, Net Principal Amount Unamortized Deferred Financing Costs Principal Amount, Net

8 unchanged sentences

400,000 3,890 396,110 400,000 4,651 395,349

6.75 % Senior Notes due 2029

750,000 11,061 738,939 — — —

7.0 % Senior Notes due 2032

750,000 11,219 738,781 — — —

Total $ 2,736,026 $ 29,326 $ 2,706,700 $ 1,585,144 $ 9,810 $ 1,575,334

On July 25, 2024 , the Company issued $ 750.0 million in aggregate principal amount of its 6.75 % Senior Notes at par with a maturity date of August 1, 2029 (“2029 Senior Notes”).

The Company received net proceeds of $ 738.5 million after deducting fees of $ 11.5 million, which are being amortized as deferred financing costs over the life of the 2029 Senior Notes.

Also on July 25, 2024 , the Company issued $ 750.0 million in aggregate principal amount of its 7.0 % Senior Notes at par with a maturity date of August 1, 2032 (“2032 Senior Notes”).

The Company received net proceeds of $ 738.5 million after deducting fees of $ 11.5 million, which are being amortized as deferred financing costs over the life of the 2032 Senior Notes.

On August 26, 2024 (“Redemption Date”), the Company redeemed the $ 349.1 million of aggregate principal amount outstanding of its 5.625 % Senior Notes due June 1, 2025 (“2025 Senior Notes”), pursuant to the terms of the indenture governing the 2025 Senior Notes which provided for a redemption price equal to 100 percent of the principal amount outstanding of the 2025 Senior Notes on the Redemption Date, plus accrued and unpaid interest.

Upon redemption, the Company recorded a loss on extinguishment of debt of $ 0.5 million related to the accelerated expense recognition of the remaining unamortized deferred financing costs.

The Company canceled all redeemed 2025 Senior Notes upon settlement.

The Senior Notes are unsecured senior obligations and rank equal in right of payment with all of the Company’s existing and any future unsecured senior debt and are senior in right of payment to any future subordinated debt.

The Company may redeem some or all of its Senior Notes prior to their maturity at redemption prices that may include a premium, plus accrued and unpaid interest as described in the indentures governing the Senior Notes.

As of June 30, 2024, the 5.625 % Senior Notes due June 1, 2025 (“2025 Senior Notes”) were classified as a noncurrent liability included in the Senior Notes, net line item on the accompanying balance sheets, as the Company intends to redeem all of the outstanding 2025 Senior Notes using proceeds from the notes offering discussed below.

On July 25, 2024 , the Company issued $ 750.0 million in aggregate principal amount of 6.750 % Senior Notes due 2029 (“2029 Senior Notes”) and $ 750.0 million in aggregate principal amount of 7.000 % Senior Notes due 2032 (“2032 Senior Notes”, and together with the 2029 Senior Notes, “New Senior Notes”).

The New Senior Notes were issued at par.

The Company intends to use the net proceeds from the New Senior Notes, together with cash on hand and borrowings under its Credit Agreement, to fund the Company’s share of the purchase price for the pending XCL Acquisition, to redeem all of its outstanding 2025 Senior Notes, and to pay related fees and expenses.

The 2029 Senior Notes are subject to a special mandatory redemption if the consummation of the XCL Acquisition does not occur on or before July 1, 2025, or if the Company notifies the trustee of the 2029 Senior Notes that it will not pursue the XCL Acquisition.

Also, on July 25, 2024, the Company issued a notice of redemption to the holders of the 2025 Senior Notes notifying such holders that the Company intends to redeem the $ 349.1 million aggregate principal amount outstanding of its 2025 Senior Notes on August 26, 2024 (“Redemption Date”).

In accordance with the terms of the indenture governing the 2025 Senior Notes, the redemption price will be equal to 100 percent of the principal amount outstanding of the 2025 Senior Notes on the Redemption Date, plus accrued and unpaid interest.

The Company is subject to certain financial and non-financial covenants under the Credit Agreement and the indentures governing the Senior Notes that, among other terms, limit the Company’s ability to incur additional indebtedness, make restricted payments including dividends, sell assets, create liens that secure debt, enter into transactions with affiliates, make certain investments, or merge or consolidate with other entities.

The Company was in compliance with all financial and non-financial covenants as of June 30, 2024, and through the filing of this report.

Please refer to Note 5 - Long-Term Debt in the 2023 Form 10-K for additional detail on the Company’s covenants under the Credit Agreement and indentures governing the Senior Notes.

payments including dividends, sell assets, create liens that secure debt, enter into transactions with affiliates, make certain investments, or merge or consolidate with other entities.

The Company was in compliance with all financial and non-financial covenants as of September 30, 2024, and through the filing of this report.

Please refer to Note 5 - Long-Term Debt in the 2023 Form 10-K , the First Amendment to the Credit Agreement, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 8, 2024, and the Second Amendment to the Credit Agreement, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 2, 2024, for additional detail on the Company’s covenants under the Credit Agreement and indentures governing the Senior Notes.

Capitalized Interest

Capitalized interest costs for the three months ended June 30, 2024, and 2023, totaled $ 6.1 million and $ 5.9 million, respectively, and totaled $ 12.2 million and $ 11.4 million for the six months ended June 30, 2024, and 2023, respectively.

Capitalized interest costs for the three months ended September 30, 2024, and 2023, totaled $ 5.4 million and $ 4.9 million, respectively, and totaled $ 17.6 million and $ 16.3 million for the nine months ended September 30, 2024, and 2023, respectively.

The amount of interest the Company capitalizes generally fluctuates based on the amount borrowed, the Company’s capital program, and the timing and amount of costs associated with capital projects that are considered in progress.

1 unchanged sentence

Note 6 - Commitments and Contingencies

Other than those items discussed below and the XCL Acquisition Agreement discussed in Note 11 - Acquisitions , there have been no changes in commitments through the filing of this report that differ materially from those disclosed in the 2023 Form 10-K .

Other than those items discussed below, there have been no changes in commitments through the filing of this report that differ materially from those disclosed in the 2023 Form 10-K .

Drilling Rig Service Contracts .

During the six months ended June 30, 2024, the Company entered into new drilling rig contracts.

As of June 30, 2024, the Company’s drilling rig commitments totaled $ 26.4 million under contract terms extending through the second quarter of 2025.

If all of the drilling rig contracts were terminated as of June 30, 2024, the Company would avoid a portion of the contractual service commitments;

During the nine months ended September 30, 2024, the Company entered into new drilling rig contracts.

As of September 30, 2024, the Company’s drilling rig commitments totaled $ 19.2 million under contract terms extending through the second quarter of 2025.

If all of the drilling rig contracts were terminated as of September 30, 2024, the Company would avoid a portion of the contractual service commitments;

however, the Company would be required to pay $ 10.4 million in early termination fees.

No early termination penalties or standby fees were incurred by the Company during the six months ended June 30, 2024, and the Company does not expect to incur material penalties with regard to its drilling rig contracts during the remainder of 2024.

No early termination penalties or standby fees were incurred by the Company during the nine months ended September 30, 2024, and the Company does not expect to incur material penalties with regard to its drilling rig contracts during the remainder of 2024.

Drilling and Completion Commitments .

During the six months ended June 30, 2024, the Company entered into an agreement that includes minimum drilling and completion footage requirements on certain existing leases.

During the nine months ended September 30, 2024, the Company entered into an agreement that includes minimum drilling and completion footage requirements on certain existing leases.

If these minimum requirements are not satisfied by March 31, 2026, the Company will be required to pay liquidated damages based on the difference between the actual footage drilled and completed and the minimum requirements.

As of June 30, 2024, the liquidated damages could range from zero to a maximum of $ 77.2 million, with the maximum exposure assuming no additional development activity occurs prior to March 31, 2026.

As of the filing of this report, the Company expects to meet its obligations under this agreement.

As of September 30, 2024, the liquidated damages could range from zero to a maximum of $ 55.0 million, with the maximum exposure assuming no additional development activity occurs prior to March 31, 2026.

As of the filing of this report, the Company expects to meet its drilling and completion footage obligations under this agreement.

Subsequent Events.

As part of the Uinta Basin Acquisition, certain contracts and leases containing both short-term and long-term commitments were assigned to the Company effective as of the closing date of October 1, 2024.

The Company is evaluating the minimum commitments, terms and conditions, and operational plans related to activities under these contracts and leases, as well as the expected financial statement impact.

Please see Note 11 - Acquisitions for discussion and the definition of the Uinta Basin Acquisition.

Certain contracts assigned to the Company include material, long-term oil gathering, processing, transportation throughput, and delivery commitments with various third-parties, under which the Company would be required to make periodic deficiency payments for any shortfalls in delivering specified minimum volume commitments.

As of October 1, 2024 , if the Company failed to deliver any product under these contracts, the aggregate undiscounted deficiency payments would total approximately $ 135.8 million.

One of these contracts does not have a minimum volume commitment associated with it, however, as of October 1, 2024, the Company would owe a cancellation fee of $ 4.9 million if the agreement was terminated.

Contingencies

13 unchanged sentences

The Company has entered into fixed price oil and gas basis swaps in order to mitigate exposure to adverse pricing differentials between certain industry benchmark prices and the actual physical pricing points where the Company’s production is sold.

As of June 30, 2024, the Company had basis swap contracts with fixed price differentials between:

As of September 30, 2024, the Company had basis swap contracts with fixed price differentials between:

• NYMEX WTI and Argus WTI Midland (“WTI Midland”) for a portion of its Midland Basin oil production with sales contracts that settle at WTI Midland prices;

4 unchanged sentences

The weighted-average fixed price differential represents the amount of net addition (reduction) to delivery month prices for the notional volumes covered by the swap contracts.

As of June 30, 2024, the Company had commodity derivative contracts outstanding through the fourth quarter of 2026 as summarized in the table below:

As of September 30, 2024, the Company had commodity derivative contracts outstanding through the fourth quarter of 2026 as summarized in the table below:

Contract Period

Third Quarter 2024

Fourth Quarter 2024

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IF HSC-NYMEX HH Volumes

3,426 5,750 946 —

Weighted-Average Contract Price $ ( 0.38 ) $ 0.0025 $ —

6 unchanged sentences

Weighted-Average Contract Price $ 41.58 $ 41.58 $ —

Commodity Derivative Contracts Entered Into Subsequent to June 30, 2024

Subsequent to June 30, 2024, and through the filing of this report, the Company entered into the following commodity derivative contracts:

• NYMEX WTI price swap contracts for the fourth quarter of 2024 for a total of 1.1 MMBbl of oil production at a weighted-average contract price of $ 74.95 per Bbl and for the second and third quarters of 2025 for a total of 0.7 MMBbl of oil production at a weighted-average contract price of $ 75.00 per Bbl;

• NYMEX WTI collar contracts for the third quarter of 2025 for a total of 0.1 MMBbl of oil production at a weighted-average floor price of $ 70.00 per Bbl and a weighted-average ceiling price of $ 80.00 per Bbl;

• NYMEX HH price swap contracts for the second quarters of 2025 and 2026 for a total of 1,430 BBtu and 1,472 BBtu of gas production, respectively, at a weighted-average contract price of $ 3.00 per MMBtu and $ 3.26 per MMBtu, respectively.

Commodity Derivative Contracts Entered Into Subsequent to September 30, 2024

Subsequent to September 30, 2024, and through the filing of this report, the Company entered into the following commodity derivative contracts:

• NYMEX WTI price swap contracts for the first through third quarters of 2025 for a total of 1.9 MMBbl of oil production at a weighted-average contract price of $ 71.72 per Bbl;

• NYMEX HH price swap contract for the second quarter of 2026 for a total of 1,430 BBtu of gas production at a weighted-average contract price of $ 3.25 per MMBtu.

Derivative Assets and Liabilities Fair Value

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The Company does not designate its commodity derivative contracts as hedging instruments.

The fair value of commodity derivative contracts at June 30, 2024, and December 31, 2023, was a net asset of $ 11.2 million and $ 57.1 million, respectively.

The fair value of commodity derivative contracts at September 30, 2024, and December 31, 2023, was a net asset of $ 81.0 million and $ 57.1 million, respectively.

The following table details the fair value of commodity derivative contracts recorded in the accompanying balance sheets, by category:

As of June 30, 2024 As of December 31, 2023

As of September 30, 2024 As of December 31, 2023

(in thousands)

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Offsetting of Derivative Assets and Liabilities

As of June 30, 2024, and December 31, 2023, all derivative instruments held by the Company were subject to master netting arrangements with various financial institutions.

As of September 30, 2024, and December 31, 2023, all derivative instruments held by the Company were subject to master netting arrangements with various financial institutions.

In general, the terms of the Company’s agreements provide for offsetting of amounts payable or receivable between it and the counterparty, at the election of both parties, for transactions that settle on the same date and in the same currency.

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Derivative Assets as of Derivative Liabilities as of

2024 December 31, 2023 June 30,

September 30,

2024 December 31, 2023 September 30,

2024 December 31, 2023

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Net amounts $ 81,022 $ 57,752 $ — $ ( 700 )

The following table summarizes the commodity components of the net derivative settlement gain, and the net derivative (gain) loss line items presented within the accompanying unaudited condensed consolidated statements of cash flows (“accompanying statements of cash flows”) and the accompanying statements of operations, respectively:

The following table summarizes the commodity components of the net derivative settlement (gain) loss, and the net derivative (gain) loss line items presented within the accompanying unaudited condensed consolidated statements of cash flows (“accompanying statements of cash flows”) and the accompanying statements of operations, respectively:

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2024 2023 2024 2023

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NGL contracts ( 243 ) ( 1,489 ) 1,228 ( 3,047 )

Total net derivative settlement gain $ ( 16,523 ) $ ( 15,636 ) $ ( 29,797 ) $ ( 20,712 )

Total net derivative settlement (gain) loss $ ( 16,491 ) $ 314 $ ( 46,288 ) $ ( 20,398 )

Net derivative (gain) loss:

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Credit Related Contingent Features

As of June 30, 2024, all of the Company’s derivative counterparties were members of the Company’s Credit Agreement lender group.

As of September 30, 2024, and through the filing of this report, all of the Company’s derivative counterparties were members of the Company’s Credit Agreement lender group.

The Company does not enter into derivative contracts with counterparties that are not part of the lender group.

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The following table is a listing of the Company’s assets and liabilities that are measured at fair value in the accompanying balance sheets and where they are classified within the fair value hierarchy:

As of June 30, 2024 As of December 31, 2023

As of September 30, 2024 As of December 31, 2023

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

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The following table reflects the fair value of the Company’s Senior Notes obligations measured using Level 1 inputs based on quoted secondary market trading prices.

These notes were not presented at fair value on the accompanying balance sheets as of June 30, 2024, or December 31, 2023, as they were recorded at carrying value, net of any unamortized deferred financing costs.

These notes were not presented at fair value on the accompanying balance sheets as of September 30, 2024, or December 31, 2023, as they were recorded at carrying value, net of any unamortized deferred financing costs.

Please refer to Note 5 - Long-Term Debt for additional information.

As of June 30, 2024 As of December 31, 2023

As of September 30, 2024 As of December 31, 2023

Principal Amount Fair Value Principal Amount Fair Value

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$ 400,000 $ 400,240 $ 400,000 $ 401,372

6.75 % Senior Notes due 2029

$ 750,000 $ 753,750 $ — $ —

7.0 % Senior Notes due 2032

$ 750,000 $ 753,780 $ — $ —

Note 9 - Earnings Per Share

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For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2024 2023 2024 2023

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Note 10 - Compensation Plans

The Company may grant various types of both short-term and long-term incentive-based awards under its compensation plans, such as cash awards, performance-based cash awards, and equity awards to eligible employees.

The Company may grant various types of both short-term and long-term incentive-based awards under its compensation plans, such as time-based cash awards, performance-based cash awards, and equity awards to eligible employees.

Additionally, the Company grants stock-based compensation to its Board of Directors and provides an employee stock purchase plan.

As of June 30, 2024, approximately 2.8 million shares of common stock were available for grant under the Company’s Equity Incentive Compensation Plan (“Equity Plan”).

As of September 30, 2024, approximately 2.3 million shares of common stock were available for grant under the Company’s Equity Incentive Compensation Plan (“Equity Plan”).

Performance Share Units

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Compensation expense for PSUs is recognized within general and administrative expense and exploration expense over the vesting periods of the respective awards.

Total compensation expense recorded for PSUs was $ 1.4 million and $ 0.2 million for the three months ended June 30, 2024, and 2023, respectively, and $ 2.4 million and $ 0.8 million for the six months ended June 30, 2024, and 2023, respectively.

As of June 30, 2024, there was $ 7.1 million of total unrecognized compensation expense related to non-vested PSUs, which is being amortized through mid-2026.

There were no material changes to the outstanding and non-vested PSUs during the six months ended June 30, 2024.

Restricted Stock Units

Total compensation expense recorded for PSUs was $ 1.1 million and $ 1.0 million for the three months ended September 30, 2024, and 2023, respectively, and $ 3.5 million and $ 1.8 million for the nine months ended September 30, 2024, and 2023, respectively.

As of September 30, 2024, there was $ 6.0 million of total unrecognized compensation expense related to non-vested PSUs, which is being amortized through mid-2026.

There were no material changes to the outstanding and non-vested PSUs during the nine months ended September 30, 2024.

Subsequent to September 30, 2024, the Company granted a total of 231,120 PSUs with a grant date fair value of $ 9.9 million.

Employee Restricted Stock Units

The Company has granted RSUs to eligible employees as part of its Equity Plan.

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Compensation expense for RSUs is recognized within general and administrative expense and exploration expense over the vesting periods of the respective awards.

Total compensation expense recorded for RSUs was $ 3.8 million and $ 3.4 million for the three months ended June 30, 2024, and 2023, respectively, and $ 7.5 million and $ 6.7 million for the six months ended June 30, 2024, and 2023, respectively.

As of June 30, 2024, there was $ 17.3 million of total unrecognized compensation expense related to non-vested RSUs, which is being amortized through mid-2026.

There were no material changes to the outstanding and non-vested RSUs during the six months ended June 30, 2024.

Subsequent to June 30, 2024, the Company settled RSUs upon the vesting of awards granted in previous years.

During the nine months ended September 30, 2024, the Company granted a total of 490,481 RSUs with a grant date fair value of $ 21.3 million, and the Company settled RSUs upon the vesting of awards granted in previous years.

The Company and all eligible recipients mutually agreed to net share settle a portion of the awards to cover income and payroll tax withholdings, as provided for in the Equity Plan and applicable award agreements.

After withholding 158,252 shares to satisfy income and payroll tax withholding obligations, the Company issued 350,675 shares of common stock in accordance with the terms of the applicable award agreements.

Additionally, the Company granted to employees a total of 461,411 RSUs with a grant date fair value of $ 20.1 million.

Total compensation expense recorded for RSUs was $ 4.5 million and $ 4.1 million for the three months ended September 30, 2024, and 2023, respectively, and $ 12.0 million and $ 10.8 million for the nine months ended September 30, 2024, and 2023, respectively.

As of September 30, 2024, there was $ 33.8 million of total unrecognized compensation expense related to non-vested RSUs, which is being amortized through mid-2027.

A summary of activity during the nine months ended September 30, 2024, is presented in the following table:

RSUs Weighted-Average Grant-Date Fair Value (1)

Non-vested at beginning of year 1,080,544 $ 31.49

Granted 490,481 $ 43.42

Vested ( 507,171 ) $ 30.18

Forfeited ( 36,906 ) $ 32.87

Non-vested at end of quarter 1,026,948 $ 37.79

____________________________________________

(1) Amounts represent price per unit.

Director Shares

During the six months ended June 30, 2024, and 2023, the Company issued a total of 37,530 and 56,872 shares, respectively, of its common stock to its non-employee directors under the Equity Plan.

During the nine months ended September 30, 2024, and 2023, the Company issued a total of 37,530 and 56,872 shares, respectively, of its common stock to its non-employee directors under the Equity Plan.

Shares issued to non-employee directors that were elected at the Company’s 2024 annual meeting of stockholders will fully vest on December 31, 2024, and shares issued to non-employee directors that were elected at the Company’s 2023 annual meeting of stockholders fully vested on December 31, 2023.

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The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code.

There were a total of 56,006 and 68,210 shares issued under the ESPP during the second quarters of 2024 and 2023, respectively.

Total proceeds to the Company for the issuance of these shares was $ 1.8 million during each of the six months ended June 30, 2024, and 2023.

There were a total of 56,006 and 68,192 shares issued under the ESPP during the nine months ended September 30, 2024, and 2023, respectively.

Total proceeds to the Company for the issuance of these shares was $ 1.8 million during each of the nine months ended September 30, 2024, and 2023.

The fair value of ESPP grants is measured at the date of grant using the Black-Scholes option-pricing model.

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2024 Acquisition Activity

On June 27, 2024 , the Company entered into a Purchase and Sale Agreement (“XCL Acquisition Agreement”) with XCL AssetCo, LLC, XCL Marketing, LLC, Wasatch Water Logistics, LLC, XCL Resources, LLC, and XCL SandCo, LLC, (collectively referred to as the “XCL Sellers”) and, solely for purposes of ratifying certain representations and warranties, interim covenants and interpretative provisions, Northern Oil and Gas, Inc.

(“NOG”), pursuant to which the Company agreed to purchase all of the rights, titles and interests in the Uinta Basin oil and gas assets owned by the XCL Sellers (“Uinta Basin Assets”).

Pursuant to the terms of the XCL Acquisition Agreement and the Cooperation Agreement, as defined below, the Company expects to, immediately prior to the closing of the transactions contemplated by the XCL Acquisition Agreement, assign an undivided 20 percent interest in the XCL Acquisition Agreement to NOG and, at the closing, cause the XCL Sellers to directly assign an undivided 20 percent interest in certain of the Uinta Basin Assets to NOG.

The Company’s undivided 80 percent in the Uinta Basin Assets consists of approximately 37,200 net acres, and first quarter 2024 production of approximately 38,200 BOE per day.

Upon the closing of the transactions contemplated by the XCL Acquisition Agreement, (collectively, the “XCL Acquisition”), the XCL Sellers will receive aggregate consideration of $ 2.55 billion in cash (“XCL Purchase Price”), subject to certain customary purchase price adjustments set forth in the XCL Acquisition Agreement.

After the anticipated assignment to NOG of an undivided 20 percent interest in the XCL Acquisition Agreement, the Company’s proportionate share of the unadjusted XCL Purchase Price will be $ 2.04 billion.

Concurrently with the execution of the XCL Acquisition Agreement, the Company entered into an Acquisition and Cooperation Agreement (“Cooperation Agreement”) with NOG.

Pursuant to the terms of the Cooperation Agreement, the Company and NOG will cooperate in connection with the XCL Acquisition Agreement, the Company and NOG agree to certain interim covenants, NOG will pay for its proportionate share of the cash deposit and the XCL Purchase Price, and NOG will become party to, and take a 20 percent undivided interest in, the XCL Acquisition Agreement.

The XCL Acquisition is expected to close on October 1, 2024 , with an effective date of May 1, 2024 .

There can be no assurance that the XCL Acquisition will close on the expected closing date or at all.

The Company is currently evaluating the XCL Acquisition to determine if it meets the criteria of a business combination under Accounting Standards Codification Topic 805, Business Combinations .

Upon execution of the XCL Acquisition Agreement, the Company deposited with an escrow agent a cash deposit of $ 102.0 million equal to five percent of the Company’s undivided 80 percent of the XCL Purchase Price, which is presented in the acquisition deposit held in escrow line item on the accompanying balance sheets.

The Company expects to fund the balance of the XCL Purchase Price through a combination of cash on hand, borrowings under the revolving credit facility, and the issuance of the New Senior Notes discussed in Note 5 - Long-Term Debt.

In connection with entry into the XCL Acquisition Agreement, on June 27, 2024, the Company obtained firm commitments for up to $ 1.2 billion of senior unsecured 364-day bridge term loans (“Bridge Facility”) and a backstop to proposed amendments to the Credit Agreement for the purpose of financing a portion of the XCL Purchase Price and/or otherwise paying related fees, costs and expenses associated with the XCL Acquisition.

The Company paid $ 9.0 million in fees to secure the Bridge Facility, which are recorded in the prepaid expenses and other line item on the accompanying balance sheets as of June 30, 2024.

The Company did not draw on the Bridge Facility, and after issuance of the New Senior Notes on July 25, 2024 , the Company terminated the Bridge Facility.

The $ 9.0 million in fees previously paid will be recognized as interest expense during the third quarter of 2024.

Pursuant to the terms of the XCL Acquisition Agreement, the Company had the option to acquire certain additional assets adjacent to the Uinta Basin Assets (“Option Assets”) from the XCL Sellers for a purchase price equal to the XCL Sellers’ cost to acquire such assets plus the XCL Sellers’ related out of pocket expenses.

On August 5, 2024 , the Company exercised its option to acquire 80

percent of the Option Assets and NOG exercised its option to acquire the remaining 20 percent.

The Company’s 80 percent share of the total acquisition cost of the Option Assets is approximately $ 70.0 million and consists of approximately 26,100 net acres, and as of May 1, 2024 , approximately 1,360 BOE per day of production.

On June 27, 2024 , the Company entered into a Purchase and Sale Agreement (“XCL Acquisition Agreement”) with XCL AssetCo, LLC, XCL Marketing, LLC, Wasatch Water Logistics, LLC, XCL Resources, LLC, and XCL SandCo, LLC, (collectively referred to as the “XCL Sellers”) and, for the limited purposes described therein, Northern Oil and Gas, Inc.

Pursuant to the XCL Acquisition Agreement, the Company agreed to purchase all of the rights, titles and interests in the Uinta Basin oil and gas assets owned by the XCL Sellers (“XCL Assets”).

Concurrently with the execution of the XCL Acquisition Agreement, the Company entered into an Acquisition and Cooperation Agreement (“Cooperation Agreement”) with NOG, pursuant to which the Company and NOG agreed to cooperate in connection with the XCL Acquisition Agreement and NOG agreed to acquire an undivided 20 percent interest in the assets acquired pursuant to the XCL Acquisition Agreement.

Upon execution of the XCL Acquisition Agreement, the Company deposited with an escrow agent a cash deposit of $ 102.0 million (“Cash Deposit”), which is presented in the acquisition deposit held in escrow line item on the accompanying balance sheets as of September 30, 2024.

Pursuant to the terms of the XCL Acquisition Agreement, the Company had the option to acquire certain additional assets adjacent to the XCL Assets (“Altamont Option Assets”) from the XCL Sellers for a purchase price equal to the XCL Sellers’ cost to acquire the Altamont Option Assets plus the XCL Sellers’ related out of pocket expenses.

On August 5, 2024 , the Company exercised the option to acquire the Altamont Option Assets.

On October 1, 2024 (“Closing Date”), immediately prior to the closing of the transactions contemplated by the XCL Acquisition Agreement, and as permitted by the XCL Acquisition Agreement and Cooperation Agreement, the Company assigned an undivided 20 percent interest in the XCL Acquisition Agreement to NOG and caused the XCL Sellers to directly assign an undivided 20 percent interest in both the XCL Assets and the Altamont Option Assets to NOG.

Accordingly, on the Closing Date, the Company completed the acquisition of an undivided 80 percent interest in both the XCL Assets and the Altamont Option Assets, with an effective date of May 1, 2024 (“Uinta Basin Acquisition”).

The Company’s undivided 80 percent interest in the assets acquired in the Uinta Basin Acquisition consists of approximately 63,300 net acres.

On the Closing Date, the unadjusted purchase price, net to the Company’s 80 percent undivided interest in the Uinta Basin Acquisition, was approximately $ 2.1 billion.

The Company paid approximately $ 1.9 billion in cash to the XCL Sellers, using a portion of

the net proceeds from the issuance of the 2029 Senior Notes and 2032 Senior Notes discussed in Note 5 - Long-Term Debt , cash on hand, and borrowings under the Company’s revolving credit facility.

Additionally, a majority of the Cash Deposit was disbursed to the XCL Sellers on the Closing Date.

The remaining portion of the Cash Deposit will remain in escrow pending the completion of post-closing purchase price adjustments, which are expected to occur in the first quarter of 2025.

Final purchase accounting for the Uinta Basin Acquisition was not complete at the time that this report was filed.

The Company expects to account for the Uinta Basin Acquisition as an asset acquisition and will include any required disclosures and information related to the Uinta Basin Acquisition in its 2024 Annual Report on Form 10-K or earlier filed Current Reports on Form 8-K, as applicable, pursuant to the rules and regulations of the SEC and authoritative accounting guidance.

2023 Acquisition Activity

On June 30, 2023 , the Company acquired approximately 20,000 net acres of oil and gas properties located in Dawson and northern Martin counties, Texas.

Total consideration paid after purchase price adjustments during the six months ended June 30, 2023, was $ 88.8 million.

Total consideration paid after purchase price adjustments during the nine months ended September 30, 2023, was $ 88.9 million.

Under authoritative accounting guidance, this transaction was accounted for as an asset acquisition.

Therefore, the properties were recorded based on the total consideration paid after purchase price adjustments and the transaction costs were capitalized as a component of the cost of the assets acquired.

Additionally, during the third quarter of 2023, the Company acquired additional working interests in certain wells located in the Midland Basin for approximately $ 20.4 million.

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-Q

Item 1. Financial Statements