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Quarterly report [Sections 13 or 15(d)]

Business Segment Reporting

v3.25.3
Business Segment Reporting
 9 Months Ended
Sep. 30, 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 and nine months ended September30, 2025 and 2024.

The Land and Resource Management segment encompasses the business of managing our approximately 882,000 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 tables present 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 and nine months ended September30, 2025 and 2024 (in thousands):
Three Months Ended September 30,
2025 2024
LRM WSO Consolidated LRM WSO Consolidated
Revenues:
Oil and gas royalties $ 108,705 $ — $ 108,705 $ 94,444 $ — $ 94,444
Water sales — 44,578 44,578 — 36,211 36,211
Produced water royalties — 32,268 32,268 — 27,727 27,727
Easements and other surface-related income 12,741 3,974 16,715 11,303 2,977 14,280
Land sales 819 — 819 901 — 901
Total revenues 122,265 80,820 203,085 106,648 66,915 173,563
Expenses:
Salaries and related employee expenses 7,298 7,089 14,387 7,182 6,848 14,030
Water service-related expenses — 16,428 16,428 — 11,731 11,731
General and administrative expenses 3,431 2,160 5,591 10,359 2,161 12,520
Depreciation, depletion and amortization 10,453 4,510 14,963 2,135 3,627 5,762
Ad valorem and other taxes 2,614 11 2,625 2,189 — 2,189
Total operating expenses 23,796 30,198 53,994 21,865 24,367 46,232
Operating income 98,469 50,622 149,091 84,783 42,548 127,331
Other income, net 4,827 1,261 6,088 6,446 1,640 8,086
Income before income taxes 103,296 51,883 155,179 91,229 44,188 135,417
Income tax expense 22,536 11,405 33,941 19,359 9,464 28,823
Net income $ 80,760 $ 40,478 $ 121,238 $ 71,870 $ 34,724 $ 106,594
Nine Months Ended September 30,
2025 2024
LRM WSO Consolidated LRM WSO Consolidated
Revenues:
Oil and gas royalties $ 314,956 $ — $ 314,956 $ 276,377 $ — $ 276,377
Water sales — 108,968 108,968 — 113,987 113,987
Produced water royalties — 90,705 90,705 — 76,034 76,034
Easements and other surface-related income 61,568 9,595 71,163 43,643 7,853 51,496
Land sales 819 — 819 2,145 — 2,145
Total revenues 377,343 209,268 586,611 322,165 197,874 520,039
Expenses:
Salaries and related employee expenses 21,727 21,304 43,031 20,127 19,135 39,262
Water service-related expenses — 36,005 36,005 — 36,767 36,767
General and administrative expenses 10,392 6,964 17,356 21,022 6,709 27,731
Depreciation, depletion and amortization 27,279 13,324 40,603 3,641 10,054 13,695
Ad valorem and other taxes 6,667 34 6,701 5,988 2 5,990
Total operating expenses 66,065 77,631 143,696 50,778 72,667 123,445
Operating income 311,278 131,637 442,915 271,387 125,207 396,594
Other income, net 12,399 3,250 15,649 25,390 5,859 31,249
Income before income taxes 323,677 134,887 458,564 296,777 131,066 427,843
Income tax expense 70,804 29,730 100,534 63,807 28,436 92,243
Net income $ 252,873 $ 105,157 $ 358,030 $ 232,970 $ 102,630 $ 335,600

Interest income by segment is included in other income, net in the table above.

The following tables present purchases of fixed assets, total assets and property, plant and equipment, net by segment for the periods presented (in thousands):
Three Months Ended
September 30,		 Nine Months Ended
September 30,
2025 2024 2025 2024
Purchases of Fixed Assets:
Land and resource management $ 10,050 $ 66 $ 10,214 $ 210
Water services and operations 10,556 9,767 24,108 21,784
Total purchases of fixed assets $ 20,606 $ 9,833 $ 34,322 $ 21,994

September 30,
2025		 December 31,
2024
Assets:
Land and resource management $ 1,290,694 $ 1,024,188
Water services and operations 234,220 223,832
Total consolidated assets $ 1,524,914 $ 1,248,020
Property, plant and equipment, net:
Land and resource management $ 7,666 $ 4,805
Water services and operations 129,861 117,773
Total consolidated property, plant and equipment, net $ 137,527 $ 122,578