INFINITY NATURAL RESOURCES, INC.INR
INFINITY NATURAL RESOURCES, INC. Revenue Disclosure
Revenues
Crude oil, natural gas, and NGL sales are recognized at the point in time when control of the product is transferred to the customer. Virtually all of our contract pricing provisions are based on market indices, with adjustments for transportation costs, quality differentials, and other contractual factors.
The following table presents commodity sales revenues from the sale of crude oil, natural gas, and NGLs:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
Oil revenues | $ | 173,612 | $ | 161,514 | $ | 85,276 | |||||||||||
Natural gas revenues | 127,448 | 51,157 | 49,617 | ||||||||||||||
NGL revenues | 49,315 | 45,035 | 24,639 | ||||||||||||||
Oil, natural gas, and natural gas liquids sales | $ | 350,375 | $ | 257,706 | $ | 159,532 | |||||||||||
Oil Sales
Our crude oil sales contracts are generally structured whereby oil is delivered to the customer at a contractually agreed-upon delivery point. This delivery point is usually at the wellhead. Revenue is recognized when control transfers to the customer at the delivery point based on the net price received from the customer. Any downstream transportation or marketing costs incurred by purchasers of our crude oil are reflected in the price we receive and are presented as a net reduction to oil sales revenues.
Natural Gas and NGL Sales
Under our natural gas processing contracts, liquids rich natural gas is delivered to a midstream gathering and processing entity at an agreed upon delivery point. The midstream entity gathers and processes the raw gas and then remits proceeds to us. For these contracts, we evaluate when control of the residue gas and NGLs is transferred in order to determine whether revenues should be recognized on a gross or net basis. Where we elect to take its residue gas and/or NGL production “in-kind” at the plant tailgate, fees incurred prior to transfer of control at the outlet of the plant are presented as gathering, processing, and transportation expense within the consolidated statements of operations. Where we do not take our residue gas and/or NGL production “in-kind”, transfer of control typically occurs at the inlet of the midstream entity’s gas gathering system such that any fees incurred subsequent to the delivery point are reflected as a net reduction to natural gas and NGL revenues presented in the table above and as included within oil, natural gas, and natural gas liquids sales within the consolidated statements of operations. Accordingly, we recognizes revenues from natural gas and NGL sales on either a gross or net basis depending on when control of the commodity transfers to the customer under the applicable contract.
Performance Obligations
Our commodity sales contracts originate upon production and do not exist beyond each day’s production. As a result, there are no remaining performance obligations under these contracts. Each delivery generally represents a separate performance obligation, and future volumes are wholly unsatisfied. Accordingly, disclosure of the transaction price allocated to remaining performance obligations is not required.
For all commodity products, we record revenue in the month production is delivered to the purchaser. Settlement statements for crude oil are generally received within 30 days following the date that production volumes are delivered, but for natural gas and NGL sales, statements may not be received for 30 to 60 days after delivery has occurred. However, payment is unconditional once the performance obligations have been satisfied. At such time, the volumes delivered and sales prices can be reasonably estimated and amounts due from customers are accrued in Accounts receivable – oil and natural gas sales, net in the consolidated balance sheets. As of December 31, 2025 and 2024, such receivable balances were $54.8 million and $39.3 million, respectively.
The Company is party to certain gathering service agreements that include minimum volume commitments (“MVCs”), which specify minimum quantities that the Company is required to deliver or pay for regardless of actual volumes
gathered. Revenue related to MVCs is recognized when the related performance obligation has been satisfied, which occurs when the gas is gathered or when it becomes remote that the Company will meet the contractual minimum volume.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.