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Annual report [Section 13 and 15(d), not S-K Item 405]

Business Segment Reporting

v3.25.4
Business Segment Reporting
 12 Months Ended
Dec. 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 years ended December31, 2025, 2024, and 2023.

The Land and Resource Management segment encompasses the business of managing our approximately 882,000 surface acres of land and our approximately 224,000 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 (“Cons”) financial results for the years ended December 31, 2025, 2024, and 2023 (in thousands):
Years Ended December 31,
2025 2024 2023
LRM WSO Cons LRM WSO Cons LRM WSO Cons
Revenues:
Oil and gas royalties $ 411,677 $ — $ 411,677 $ 373,331 $ — $ 373,331 $ 357,394 $ — $ 357,394
Water sales — 169,701 169,701 — 150,724 150,724 — 112,203 112,203
Produced water royalties — 124,218 124,218 — 104,123 104,123 — 84,260 84,260
Easements and other surface-related income 78,230 13,545 91,775 63,074 10,183 73,257 67,905 3,027 70,932
Land sales 819 — 819 4,388 — 4,388 6,806 — 6,806
Total revenues 490,726 307,464 798,190 440,793 265,030 705,823 432,105 199,490 631,595
Expenses:
Salaries and related employee expenses 29,184 28,741 57,925 27,493 26,128 53,621 21,945 21,439 43,384
Water service-related expenses — 53,528 53,528 — 46,124 46,124 — 33,566 33,566
General and administrative expenses 14,358 9,422 23,780 25,531 8,952 34,483 39,078 7,372 46,450
Depreciation, depletion and amortization 44,555 17,978 62,533 10,968 14,194 25,162 3,073 11,684 14,757
Ad valorem and other taxes 8,218 45 8,263 7,257 38 7,295 7,382 3 7,385
Total operating expenses 96,315 109,714 206,029 71,249 95,436 166,685 71,478 74,064 145,542
Operating income 394,411 197,750 592,161 369,544 169,594 539,138 360,627 125,426 486,053
Interest expense (552) (138) (690) — — — — — —
Other income, net 14,926 3,932 18,858 31,707 7,976 39,683 30,384 1,124 31,508
Income before income taxes 408,785 201,544 610,329 401,251 177,570 578,821 391,011 126,550 517,561
Income tax expense 86,370 42,583 128,953 86,350 38,511 124,861 84,305 27,611 111,916
Net income $ 322,415 $ 158,961 $ 481,376 $ 314,901 $ 139,059 $ 453,960 $ 306,706 $ 98,939 $ 405,645

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 (in thousands):
Years Ended December 31,
2025 2024 2023
Purchases of Fixed Assets:
Land and resource management $ 10,282 $ 279 $ 241
Water services and operations 55,666 29,144 15,190
Total purchases of fixed assets $ 65,948 $ 29,423 $ 15,431
December 31, 2025 December 31, 2024
Assets:
Land and resource management $ 1,332,180 $ 1,024,188
Water services and operations 291,098 223,832
Total consolidated assets $ 1,623,278 $ 1,248,020
Property, plant and equipment, net:
Land and resource management $ 7,336 $ 4,805
Water services and operations 157,202 117,773
Total consolidated property, plant and equipment, net $ 164,538 $ 122,578