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SEC filingQ1 2026 revenue exploded 360% to $40.2M from $8.7M driven by merger production gains, yielding $6.7M operating income at 16.7% margin, though a large net loss of $25.6M from derivatives overshadowed results amid rising oil prices.
Operating income reached $6.7 million, up dramatically from $150 thousand prior year, delivering a healthy 16.7% margin. The leverage emerged because production gains from the Acquired Companies outpaced related cost inflation, with acquired properties contributing to higher but manageable lease operating and variable expenses. This underscores the operating expertise applied to the new assets across D-J Basin, Powder River Basin, and Permian Basin inventories.
Despite operational strength, net income swung to a $25.6 million loss from $140 thousand profit, with diluted EPS at -$3.28. The defining dynamic was derivative losses in a rising oil price environment, where hedges proved insufficient against market gains, erasing operating profits. This non-cash volatility highlights exposure risks but does not undermine core business momentum.