DERIVATIVE INSTRUMENTS (Tables)
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6 Months Ended |
Jun. 30, 2022 |
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| General Discussion of Derivative Instruments and Hedging Activities [Abstract] |
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| Schedule of Open Fixed Price Swap Positions and Natural Gas Basis Swap Positions |
Below is a summary of the Company’s open fixed price swap positions as of June 30, 2022.
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Index |
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Daily Volume |
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Weighted
Average Price |
| Natural Gas |
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(MMBtu/d) |
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($/MMBtu) |
| Remaining 2022 |
NYMEX Henry Hub |
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210,000 |
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$ |
2.92 |
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| 2023 |
NYMEX Henry Hub |
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165,014 |
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$ |
3.64 |
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| 2024 |
NYMEX Henry Hub |
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54,973 |
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$ |
3.98 |
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| Oil |
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(Bbl/d) |
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($/Bbl) |
| Remaining 2022 |
NYMEX WTI |
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2,500 |
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$ |
66.12 |
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| 2023 |
NYMEX WTI |
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3,000 |
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$ |
74.47 |
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| NGL |
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(Bbl/d) |
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($/Bbl) |
| Remaining 2022 |
Mont Belvieu C3 |
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3,750 |
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$ |
36.59 |
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| 2023 |
Mont Belvieu C3 |
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3,000 |
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$ |
38.07 |
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The Company entered into costless collars based off the NYMEX WTI and Henry Hub oil and natural gas indices. Each two-way price collar has a set floor and ceiling price for the hedged production. If the applicable monthly price indices are outside of the ranges set by the floor and ceiling prices in the various collars, the Company will cash-settle the difference with the hedge counterparty. Below is a summary of the Company's costless collar positions as of June 30, 2022.
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Index |
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Daily Volume |
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Weighted Average Floor Price |
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Weighted Average Ceiling Price |
| Natural Gas |
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(MMBtu/d) |
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($/MMBtu) |
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($/MMBtu) |
| Remaining 2022 |
NYMEX Henry Hub |
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416,500 |
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$ |
2.56 |
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$ |
3.05 |
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| 2023 |
NYMEX Henry Hub |
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285,000 |
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$ |
2.93 |
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$ |
4.78 |
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| 2024 |
NYMEX Henry Hub |
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60,000 |
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$ |
3.50 |
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$ |
7.49 |
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| Oil |
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(Bbl/d) |
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($/Bbl) |
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($/Bbl) |
| Remaining 2022 |
NYMEX WTI |
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1,500 |
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$ |
55.00 |
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$ |
60.00 |
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Index |
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Daily Volume |
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Weighted Average Price |
| Natural Gas |
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(MMBtu/d) |
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($/MMBtu) |
| Remaining 2022 |
NYMEX Henry Hub |
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152,675 |
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$ |
2.90 |
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| 2023 |
NYMEX Henry Hub |
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407,925 |
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$ |
2.90 |
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| 2024 |
NYMEX Henry Hub |
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202,000 |
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$ |
3.33 |
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| 2025 |
NYMEX Henry Hub |
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33,315 |
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$ |
4.65 |
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| Schedule of Natural Gas Basis Swap Positions |
In addition, the Company entered into natural gas basis swap positions. As of June 30, 2022, the Company had the following natural gas swap positions open:
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Gulfport Pays |
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Gulfport Receives |
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Daily Volume |
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Weighted Average Fixed Spread |
| Natural Gas |
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(MMBtu/d) |
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($/MMBtu) |
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| 2023 |
Rex Zone 3 |
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NYMEX Plus Fixed Spread |
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40,000 |
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$ |
(0.21) |
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| Schedule of Derivative Instruments in Balance Sheet |
The following table presents the fair value of the Company’s derivative instruments on a gross basis at June 30, 2022 and December 31, 2021 (in thousands):
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Successor |
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June 30, 2022 |
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December 31, 2021 |
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| Short-term derivative asset |
$ |
24,487 |
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$ |
4,695 |
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| Long-term derivative asset |
26,394 |
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18,664 |
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| Short-term derivative liability |
(674,404) |
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(240,735) |
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| Long-term derivative liability |
(306,389) |
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(184,580) |
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| Total commodity derivative position |
$ |
(929,912) |
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$ |
(401,956) |
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| Schedule of Net Loss on Derivatives |
The following tables present the gain and loss recognized in net loss on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the Current Successor Quarter, Current Successor YTD Period, Prior Successor Period, Prior Predecessor Quarter, and Prior Predecessor YTD Period (in thousands):
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Net loss on derivative instruments |
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Successor |
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Predecessor |
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Three Months Ended June 30, 2022 |
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Period from May 18, 2021 through June 30, 2021 |
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Period from April 1, 2021 through May 17, 2021 |
| Natural gas derivatives - fair value gains (losses) |
$ |
121,659 |
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$ |
(120,264) |
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$ |
(97,543) |
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| Natural gas derivatives - settlement losses |
(288,936) |
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(6,689) |
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(3,486) |
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| Total losses on natural gas derivatives |
(167,277) |
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(126,953) |
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(101,029) |
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| Oil derivatives - fair value gains (losses) |
4,383 |
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(5,357) |
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(4,395) |
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| Oil derivatives - settlement losses |
(14,281) |
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— |
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— |
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| Total losses on oil and condensate derivatives |
(9,898) |
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(5,357) |
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(4,395) |
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| NGL derivatives - fair value gains (losses) |
9,506 |
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(7,348) |
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(1,837) |
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| NGL derivatives - settlement losses |
(5,202) |
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— |
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— |
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| Total gains (losses) on NGL derivatives |
4,304 |
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(7,348) |
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(1,837) |
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| Total losses on natural gas, oil and NGL derivatives |
$ |
(172,871) |
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$ |
(139,658) |
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$ |
(107,261) |
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Net loss on derivative instruments |
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Successor |
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Predecessor |
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Six Months Ended June 30, 2022 |
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Period from May 18, 2021 through June 30, 2021 |
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Period from January 1, 2021 through May 17, 2021 |
| Natural gas derivatives - fair value losses |
$ |
(497,660) |
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$ |
(120,264) |
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$ |
(123,080) |
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| Natural gas derivatives - settlement losses |
(400,093) |
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(6,689) |
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(3,362) |
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| Total losses on natural gas derivatives |
(897,753) |
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(126,953) |
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(126,442) |
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| Oil derivatives - fair value losses |
(25,470) |
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(5,357) |
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(6,126) |
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| Oil derivatives - settlement losses |
(22,425) |
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— |
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— |
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| Total losses on oil and condensate derivatives |
(47,895) |
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(5,357) |
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(6,126) |
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| NGL derivatives - fair value losses |
(4,827) |
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(7,348) |
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(4,671) |
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| NGL derivatives - settlement losses |
(10,947) |
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— |
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— |
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| Total losses on NGL derivatives |
(15,774) |
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(7,348) |
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(4,671) |
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| Total losses on natural gas, oil and NGL derivatives |
$ |
(961,422) |
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$ |
(139,658) |
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$ |
(137,239) |
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| Schedule of Recognized Derivative Assets |
The following tables present the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value (in thousands):
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Successor |
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As of June 30, 2022 |
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Gross Assets (Liabilities) |
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Gross Amounts |
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Presented in the |
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Subject to Master |
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Net |
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Consolidated Balance Sheets |
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Netting Agreements |
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Amount |
| Derivative assets |
$ |
50,881 |
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$ |
(50,479) |
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$ |
402 |
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| Derivative liabilities |
$ |
(980,793) |
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$ |
50,479 |
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$ |
(930,314) |
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Successor |
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As of December 31, 2021 |
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Gross Assets (Liabilities) |
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Gross Amounts |
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Presented in the |
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Subject to Master |
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Net |
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Consolidated Balance Sheets |
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Netting Agreements |
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Amount |
| Derivative assets |
$ |
23,359 |
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$ |
(20,265) |
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$ |
3,094 |
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| Derivative liabilities |
$ |
(425,315) |
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$ |
20,265 |
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$ |
(405,050) |
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| Schedule of Recognized Derivative Liabilities |
The following tables present the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value (in thousands):
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Successor |
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As of June 30, 2022 |
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Gross Assets (Liabilities) |
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Gross Amounts |
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Presented in the |
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Subject to Master |
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Net |
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Consolidated Balance Sheets |
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Netting Agreements |
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Amount |
| Derivative assets |
$ |
50,881 |
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$ |
(50,479) |
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$ |
402 |
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| Derivative liabilities |
$ |
(980,793) |
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$ |
50,479 |
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$ |
(930,314) |
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Successor |
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As of December 31, 2021 |
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Gross Assets (Liabilities) |
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Gross Amounts |
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Presented in the |
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Subject to Master |
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Net |
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Consolidated Balance Sheets |
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Netting Agreements |
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Amount |
| Derivative assets |
$ |
23,359 |
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$ |
(20,265) |
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$ |
3,094 |
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| Derivative liabilities |
$ |
(425,315) |
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$ |
20,265 |
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$ |
(405,050) |
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