Regulatory Risk The Company’s operations are subject to extensive regulation by federal, state, and local authorities, including regulatory oversight by BOEM, BSEE, and PHMSA. Additionally, California maintains a complex regulatory framework governing offshore and onshore oil and gas operations, pipeline transportation, environmental compliance, and permitting. Regulatory approvals required to modify infrastructure may be subject to additional conditions, delays, or legal challenge, which could increase costs or affect the timing of planned activities. Certain regulatory matters and related uncertainties are discussed in Note 6 — Commitments and Contingencies to the unaudited condensed consolidated financial statements. While the Company cannot reasonably quantify the financial impact of future regulatory actions, delays or changes in regulatory requirements, such occurrences could result in incremental capital expenditures, periods without revenue, or reduced cash flows, which could adversely affect the Company’s liquidity as described in Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations. Debt Refinance and Liquidity Risk The Company’s Senior Secured Term Loan was scheduled to mature on July 26, 2026. On July 2, 2026, the Company completed the 2026 Refinancing Transactions, repaid the Senior Secured Term Loan in full, entered into the New Senior Secured Credit Facilities and issued the Convertible Notes. Refer to “Recent and Significant Events” above and Note 10—Subsequent Events to the condensed consolidated financial statements for additional details regarding the 2026 Refinancing Transactions. Commodity Price Risk The Company’s financial performance is sensitive to fluctuations in crude oil prices. Changes in oil prices could materially affect the Company’s revenues, operating cash flows, capital investment decisions, and ability to service its indebtedness. Crude oil prices are subject to significant volatility driven by global supply and demand dynamics, geopolitical events, regulatory actions, and regional market dynamics, including those specific to California. While the Company has engaged in risk management activities following the 2026 Refinancing Transactions, it did not have commodity price hedging arrangements in place as of June 30, 2026. Accordingly, a sustained decline in oil prices could adversely affect the economics of the Company's production and its financial condition. Refer to Note 10—Subsequent Events to the condensed consolidated financial statements for additional details regarding commodity hedging activity executed in July 2026.