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DERIVATIVES AND HEDGING ACTIVITIES
 12 Months Ended
Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES AND HEDGING ACTIVITIES DERIVATIVES AND HEDGING ACTIVITIES
The Company is exposed to certain risks arising from both its business operations and economic conditions, and it enters into certain derivative contracts to manage exposure to these risks. To minimize counterparty credit risk in derivative instruments, the Company enters into transactions with high credit-rating counterparties. The Company did not elect to apply hedge accounting to these derivative contracts and recorded the fair value of the derivatives on the Consolidated Balance Sheets as of December 31, 2025 and 2024.
Interest Rate Risk
The Company manages market risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its debt funding and by using derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates.
The Company’s objectives in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as interest rate derivatives involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract.
As of December 31, 2025, the Company had nine interest rate swap contracts with total notional amounts of $675.0 million effective on May 1, 2023 and matured on December 31, 2025 that paid a fixed rate ranging from 3.02% to 4.18% and two interest rate swap contracts with a total notional amount of $500.0 million effective December 31, 2025 and maturing on December 31, 2026 that pay a fixed rate ranging from 3.41% to 3.42%.
The fair value or settlement value of the consolidated interest rate swaps outstanding are presented on a gross basis on the Consolidated Balance Sheets. The following table presents the fair value of derivative assets and liabilities related to the interest rate swap contracts:
December 31December 31
20252024
(In thousands)
Derivatives assets - current$4 $504 
      Total derivative assets$4 $504 
Derivative liabilities - current$135 $1,206 
      Total derivative liabilities$135 $1,206 
The Company recorded cash settlements and changes in fair value of the interest rate swap contracts in “Interest expense” of the Consolidated Statements of Operations. The following table presents interest rate swap derivatives activities for the years ended December 31, 2025, 2024 and 2023:
For the Year Ended December 31,
202520242023
(In thousands)
Realized gain on interest rate swaps$608 $13,149 $12,651 
Favorable fair value adjustment$1,179 $13,482 $17,270 
Commodity Price Risk
The results of the Company’s operations may be affected by the market prices of oil, natural gas and NGLs. A portion of the Company’s revenue is directly tied to local natural gas, natural gas liquids and condensate prices in the Permian Basin and the U.S. Gulf Coast. Fluctuations in commodity prices also impact operating cost both directly and indirectly. Management regularly reviews the Company’s potential exposure to commodity price risk and manages exposure of such risk through commodity hedge contracts.
During the past 12 months, the Company entered into multiple commodity swap contracts based on the OPIS NGL Mont Belvieu prices for ethane, propane and butane, the Waha Basis index, the HSC index and the NYMEX West Texas Intermediate Control index. These contracts are for various notional quantities of NGLs, natural gas and crude. Similarly, the Company has entered into various natural gas basis spread swaps and crude collars. These contracts are effective over the next 1 to 24 months and are used to hedge against location price risk of the respective commodity resulting from supply and demand volatility and protect cash flows against price fluctuations.
The table below presents detail information of commodity swaps outstanding as of December 31, 2025 (in thousands, except volumes):
December 31, 2025
CommodityUnitVolumeNet Fair Value
(In thousands)
Natural GasMMBtus6,660,000 $2,611 
NGLGallons178,367,700 7,933 
CrudeBbl601,200 3,618 
Natural Gas Basis Spread SwapsMMBtus13,220,000 (4,164)
$9,998 
The fair value or settlement value of the outstanding swaps are presented on a gross basis on the Consolidated Balance Sheets. The following table presents the fair value of derivative assets and liabilities related to commodity swaps:
December 31December 31
20252024
(In thousands)
Derivatives assets - current$13,902 $1,804 
Derivative assets - noncurrent1,467 65 
      Total derivative assets$15,369 $1,869 
Derivative liabilities - current$5,371 $8,805 
Derivative liabilities - noncurrent
— 1937 
      Total derivative liabilities$5,371 $10,742 
The Company recorded cash settlements and fair value adjustments on commodity swap derivatives in “Product revenue” of the Consolidated Statements of Operations. The following table presents commodity swap derivatives activities for the years ended December 31, 2025, 2024 and 2023:
For the Year Ended December 31,
202520242023
(In thousands)
Realized gain (loss) on commodity swaps
$3,679 $(20,407)$13,056 
Favorable (unfavorable) fair value adjustment
$22,550 $(31,195)$16,400