Company: ACTG
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000934549-25-000042
Chunk: 46

Company: ACACIA RESEARCH CORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 46
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114 Commodity derivative liabilitiesGross amount of recognized liabilities$2,031 $1,106 Gross amount offset on the balance sheet(2,031)(1,106)Net amount of liabilities on the balance sheet$— $— Benchmark’s realized derivative gain was $869,000 and $826,000 for the three and six months ended June 30, 2025, respectively. Benchmark’s realized derivative gain was $113,000 and $913,000 for the three and six months ended June 30, 2024, respectively. Benchmark’s unrealized derivative gain for the three and six months ended June 30, 2025 was $5.8 million and $789,000, respectively, and an unrealized derivative loss of $2.8 million and $3.4 million for the three and six months ended June 30, 2024, respectively. In accordance with U.S. GAAP, from time to time, the Company measures certain assets and liabilities at fair value on a nonrecurring basis. Assets and liabilities accounted for on a non-recurring basis include asset retirement obligations incurred by the drilling of new oil and natural gas wells, the change in estimated asset retirement obligations, and the carrying value of proved and unproved oil and natural gas properties following impairment. The fair value of the asset retirement obligations is measured using valuation techniques consistent with the income approach, which converts future cash flows to a single discounted amount and significant inputs include the estimated plug and abandonment cost per well, the estimated life per well and the credit-adjusted risk-free rate. The fair value of the asset retirement obligations are within Level 3 of the fair value hierarchy. In connection with our Revolution Transaction, the fair value of the oil and gas properties was determined based upon estimated future discounted cash flow, a Level 3 input, using estimated production which we reasonably expect, and estimated prices adjusted for differentials. Unobservable inputs include estimated future oil and natural gas production, prices, operating and development costs and a discount rate of 12%, all Level 3 inputs 

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within the fair value hierarchy. The Company also reviews the carrying value of equity securities without readily determinable fair value, equity method investments and patents on a quarterly basis for indications of impairment, and other long-lived assets at least annually. When indications of potential impairment are identified, the Company may be required to determine the fair value of those assets and record an adjustment for the carrying amount in excess of the fair value determined. Any fair value