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Quarterly report [Sections 13 or 15(d)]

Business Segment Reporting

v3.25.1
Business Segment Reporting
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]
Business Segment Reporting Business Segment Reporting
During the periods presented, we reported our financial performance based on the following reportable segments: Land and Resource Management and Water Services and Operations. We eliminate inter-segment revenues and expenses, if any, upon consolidation. There were no inter-segment revenues for the three months ended March31, 2025 and 2024.

The Land and Resource Management segment encompasses the business of managing our approximately 873,000 surface acres of land and our approximately 207,000 NRA of oil and gas royalty interests, principally concentrated in the Permian Basin. The revenue streams of this segment consist primarily of royalties from oil and gas, revenues from easements and commercial leases, and land and material sales.

The Water Services and Operations segment encompasses the business of providing a full-service water offering to operators in the Permian Basin. The revenue streams of this segment primarily consist of revenue generated from sales of sourced and treated water as well as revenue from produced water royalties.
The following table presents segment financial results for Land and Resource Management (“LRM”) and Water Service and Operations (“WSO”) and the reconciliation to consolidated financial results for the three months ended March31, 2025 and 2024 (in thousands):
Three Months Ended March 31,
2025 2024
LRM WSO Consolidated LRM WSO Consolidated
Revenues:
Oil and gas royalties $ 111,245 $ — $ 111,245 $ 92,120 $ — $ 92,120
Water sales — 38,813 38,813 — 37,126 37,126
Produced water royalties — 27,700 27,700 — 23,006 23,006
Easements and other surface-related income 15,336 2,889 18,225 18,121 2,525 20,646
Land sales — — — 1,244 — 1,244
Total revenues 126,581 69,402 195,983 111,485 62,657 174,142
Expenses:
Salaries and related employee expenses 7,404 7,168 14,572 6,465 5,996 12,461
Water service-related expenses — 11,126 11,126 — 10,212 10,212
General and administrative expenses 3,313 2,759 6,072 6,674 2,557 9,231
Depreciation, depletion and amortization 7,689 4,252 11,941 693 3,147 3,840
Ad valorem and other taxes 2,189 10 2,199 2,356 1 2,357
Total operating expenses 20,595 25,315 45,910 16,188 21,913 38,101
Operating income 105,986 44,087 150,073 95,297 40,744 136,041
Other income, net 3,416 905 4,321 7,930 2,013 9,943
Income before income taxes 109,402 44,992 154,394 103,227 42,757 145,984
Income tax expense 23,858 9,884 33,742 22,256 9,311 31,567
Net income $ 85,544 $ 35,108 $ 120,652 $ 80,971 $ 33,446 $ 114,417

Interest income by segment is included in other income, net in the table above.
The following tables present capital expenditures, total assets and property, plant and equipment, net by segment for the periods presented (in thousands):

Three Months Ended
March 31,
2025 2024
Capital Expenditures:
Land and resource management $ 3 $ 51
Water services and operations 9,905 5,611
Total capital expenditures $ 9,908 $ 5,662

March 31,
2025		 December 31,
2024
Assets:
Land and resource management $ 1,127,711 $ 1,024,188
Water services and operations 225,581 223,832
Total consolidated assets $ 1,353,292 $ 1,248,020
Property, plant and equipment, net:
Land and resource management $ 4,608 $ 4,805
Water services and operations 123,860 117,773
Total consolidated property, plant and equipment, net $ 128,468 $ 122,578