Group 1 - Dorchester Minerals (NASDAQ: DMLP) announced a distribution of approximately $0.62 per unit for Q2 2025, which represents a decrease of around 15% compared to its Q1 2025 distribution [2] - The decline in distribution was attributed to lower sales volumes and weaker commodity prices [2] Group 2 - The article highlights the expertise of Aaron Chow, who has over 15 years of analytical experience and is recognized as a top-rated analyst on TipRanks [2] - Aaron Chow co-founded a mobile gaming company that was acquired by PENN Entertainment and has experience in designing economic models for mobile apps with significant user engagement [2]

[Disclosure Regarding Forward-Looking Statements](index=4&type=section&id=DISCLOSURE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines that statements in the report are forward-looking and subject to risks and uncertainties that could cause actual results to differ materially - Statements in this report that are not historical facts are forward-looking and involve a number of risks and uncertainties[8](index=8&type=chunk)[9](index=9&type=chunk) - Actual results could differ materially from those expressed or implied due to factors such as changes in oil and natural gas prices or demand, economic and industry conditions, regulatory requirements, and geopolitical conflicts[9](index=9&type=chunk) [Part I – Financial Information](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis for the reporting period [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents the unaudited condensed consolidated financial statements for Dorchester Minerals, L.P., covering the balance sheets, income statements, statements of changes in partnership capital, and cash flows for the periods ended June 30, 2025, and December 31, 2024 (balance sheet), or June 30, 2024 (income, cash flow, capital) [Condensed Consolidated Balance Sheets](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section provides a snapshot of the Partnership's financial position at specific dates, detailing assets, liabilities, and partnership capital | Metric | June 30, 2025 (in Thousands) | December 31, 2024 (in Thousands) | Change (vs. Dec 31, 2024) | | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------ | | Total assets | $325,632 | $366,812 | -$41,180 (-11.2%) | | Total liabilities | $5,793 | $5,024 | +$769 (+15.3%) | | Total partnership capital | $319,839 | $361,788 | -$41,949 (-11.6%) | [Condensed Consolidated Income Statements](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20INCOME%20STATEMENTS) This section presents the Partnership's financial performance over specific periods, detailing revenues, expenses, and net income | Metric (in Thousands, except per unit) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :------------------------------------- | :------------------------------- | :------------------------------- | :----------- | :------------------------------- | :------------------------------- | :----------- | | Total operating revenues | $32,395 | $37,360 | -13.3% | $75,559 | $68,339 | +10.6% | | Total costs and expenses | $20,048 | $13,732 | +46.0% | $45,570 | $26,544 | +71.7% | | Net income | $12,347 | $23,628 | -47.8% | $29,989 | $41,795 | -28.3% | | Net income per common unit | $0.25 | $0.57 | -56.1% | $0.61 | $1.01 | -39.6% | [Condensed Consolidated Statements of Changes in Partnership Capital](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20PARTNERSHIP%20CAPITAL) This section outlines the changes in the Partnership's equity over specific periods, including net income and distributions | Metric (in Thousands) | June 30, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------ | | Total Partnership Capital (Q2) | $319,839 | $170,546 | | Total Partnership Capital (YTD) | $319,839 | $170,546 | | Distributions per common unit (Q2) | $0.725835 | $0.781837 | | Distributions per common unit (YTD) | $1.465247 | $1.789711 | - Partnership capital increased significantly from Q2 2024 to Q2 2025, primarily due to acquisitions of oil and natural gas properties for common units in 2024[20](index=20&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section details the cash inflows and outflows from operating, investing, and financing activities for the Partnership | Metric (in Thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------- | | Net cash provided by operating activities | $63,916 | $57,388 | +11.4% | | Net cash contributed in acquisitions | $2,028 | $4,595 | -55.9% | | Distributions paid | $(71,938) | $(73,847) | -2.6% | | Decrease in cash and cash equivalents | $(5,994) | $(11,864) | -49.5% | | Cash and cash equivalents at end of period | $36,514 | $35,161 | +3.8% | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=NOTES%20TO%20THE%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides additional information and explanations regarding the accounting policies and significant transactions presented in the financial statements - The Partnership's business involves the acquisition, ownership, and administration of Royalty Properties and Net Profits Interest (NPI) across **594 counties and parishes in 28 states**[25](index=25&type=chunk) - In November 2024, FASB issued ASU 2024-03, requiring additional expense disaggregation disclosures, effective for annual periods beginning after December 15, 2026. Management is currently evaluating its impact[29](index=29&type=chunk) - The Partnership completed significant acquisitions of mineral, royalty, and overriding royalty interests in September 2024 and March 2024, primarily in New Mexico, Texas, and Colorado, in exchange for common units valued at **$202.6 million**, **$16.0 million**, and **$17.0 million** respectively[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - A cash distribution for the second quarter of 2025 of **$0.620216 per common unit** was announced on July 24, 2025, payable on August 14, 2025[35](index=35&type=chunk) - The Partnership operates as a single operating and reportable segment, with the CEO using Net income to assess financial performance and allocate resources on a consolidated basis[36](index=36&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=12&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the financial performance and condition, highlighting key drivers of changes in net income and cash flows, including commodity prices, sales volumes, and operational expenses, for the three and six months ended June 30, 2025, compared to the prior year [Overview of Business and Operations](index=12&type=section&id=Overview) This section describes the Partnership's core business activities, including its ownership of various mineral and royalty interests - The Partnership owns producing and nonproducing mineral, royalty, overriding royalty, net profits, and leasehold interests (Royalty Properties) in **594 counties and parishes across 28 states**[40](index=40&type=chunk) - The Partnership holds a **96.97% Net Profits Interest (NPI)** in various properties owned by Dorchester Minerals Operating LP, receiving monthly payments based on net profits[41](index=41&type=chunk) - As of June 30, 2025, the NPI was in a surplus position with **$7.3 million in cash on hand** for outstanding capital commitments, primarily in the Bakken region[42](index=42&type=chunk) [Commodity Price Risks and Tariffs](index=12&type=section&id=Commodity%20Price%20Risks) This section discusses the significant impact of fluctuating commodity prices and trade tariffs on the Partnership's profitability and operations - The Partnership's profitability is significantly affected by fluctuating oil and natural gas market prices, which are determined by global supply and demand, geopolitical events (e.g., war in Ukraine, Middle East conflicts), interest rates, and actions taken by OPEC+[43](index=43&type=chunk)[44](index=44&type=chunk) - Increased U.S. tariffs and potential retaliatory tariffs by foreign jurisdictions create uncertainty regarding raw material costs, availability, and inflation, impacting the markets where the Partnership owns properties[45](index=45&type=chunk) [Results of Operations](index=14&type=section&id=Results%20of%20Operations) This section analyzes the key factors influencing the Partnership's revenues, expenses, and net income for the reporting periods - The Partnership completed significant acquisitions in September 2024 (**14,225 net mineral acres in NM/TX for $202.6 million in common units**; **1,204 net royalty acres in CO for $16.0 million in common units**) and March 2024 (**1,485 net royalty acres in CO for $17.0 million in common units**), which impacted the Partnership's asset base[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) | Metric | Q2 2025 | Q2 2024 | Q2 Change (YoY) | YTD 2025 | YTD 2024 | YTD Change (YoY) | | :-------------------------------- | :------ | :------ | :-------------- | :------- | :------- | :--------------- | | **Sales Volumes:** | | | | | | | | Royalty Properties natural gas (mmcf) | 1,341 | 1,275 | +5% | 2,824 | 2,543 | +11% | | Royalty Properties oil (mbbls) | 399 | 423 | -6% | 917 | 766 | +20% | | NPI natural gas (mmcf) | 493 | 493 | 0% | 929 | 982 | -5% | | NPI oil (mbbls) | 163 | 131 | +24% | 298 | 307 | -3% | | **Average Sales Prices:** | | | | | | | | Royalty Properties natural gas ($/mcf) | $1.39 | $1.47 | -5% | $2.50 | $1.54 | +62% | | Royalty Properties oil ($/bbl) | $56.51 | $70.28 | -20% | $60.18 | $68.63 | -12% | | NPI natural gas ($/mcf) | $2.20 | $2.34 | -6% | $3.00 | $1.93 | +55% | | NPI oil ($/bbl) | $61.86 | $69.26 | -11% | $61.62 | $67.61 | -9% | - Lease bonus revenue significantly increased to **$3.6 million in Q2 2025** (vs. $0.1 million in Q2 2024) and **$3.8 million YTD 2025** (vs. $0.1 million YTD 2024), primarily from a lease extension in Reagan County, Texas[17](index=17&type=chunk)[56](index=56&type=chunk) - Operating costs decreased **28% in Q2 2025 YoY** due to lower proportionate production taxes and post-production costs, but increased **13% YTD 2025 YoY** due to higher production taxes, post-production costs, and ad valorem taxes[57](index=57&type=chunk)[58](index=58&type=chunk) - Depreciation, depletion, and amortization (DD&A) increased significantly by **92% in Q2 2025 YoY** and **116% YTD 2025 YoY**, driven by changes in oil and natural gas reserves estimates and recent acquisitions[59](index=59&type=chunk) - General and administrative (G&A) expenses increased **11% in Q2 2025 YoY** and **23% YTD 2025 YoY**, mainly due to higher data services costs, compensation expenses (including an expanded equity program), increased legal fees, and regulatory filing fees[60](index=60&type=chunk) - Net cash provided by operating activities increased **11% YTD 2025 YoY**, primarily due to higher Royalty Properties revenue and lease bonus receipts, partially offset by lower NPI payments and higher G&A expenses[61](index=61&type=chunk) [Liquidity and Capital Resources](index=17&type=section&id=Liquidity%20and%20Capital%20Resources) This section evaluates the Partnership's ability to meet its financial obligations and fund operations through its cash flows and capital structure - The Partnership's primary sources of capital are cash flows from Royalty Properties and the Net Profits Interest (NPI), with a partnership agreement requiring quarterly distributions of all funds received, less certain expenses and reasonable reserves[66](index=66&type=chunk) | Year | Lease Payments (in Thousands) | | :--- | :---------------------------- | | 2025 | $182 | | 2026 | $368 | | 2027 | $374 | | 2028 | $380 | | 2029 | $63 | | Total Lease Payments | $1,367 | | Less amount representing interest | $(460) | | Total Lease Obligation | $907 | - The Partnership expects sufficient liquidity to fund distributions and operations despite potential uncertainties from global military conflicts, inflation, and interest rates, but acknowledges risks from oil and natural gas price volatility and trade policy changes[69](index=69&type=chunk)[70](index=70&type=chunk) | Date | Amount (in Millions) | | :----------- | :----- | | June 30, 2025 | $36.5 | | December 31, 2024 | $42.5 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=19&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No significant changes in the Partnership's exposure to market risk were reported for the three months ended June 30, 2025, compared to previous disclosures in the Annual Report - There have been no significant changes in the Partnership's exposure to market risk during the three months ended June 30, 2025[74](index=74&type=chunk) [Item 4. Controls and Procedures](index=19&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The Partnership's principal executive and financial officers evaluated the effectiveness of disclosure controls and procedures, concluding they were effective as of June 30, 2025. No material changes in internal control over financial reporting occurred during the quarter - The principal executive officer and principal financial officer concluded that the Partnership's disclosure controls and procedures were effective as of June 30, 2025[75](index=75&type=chunk) - There were no material changes in the Partnership's internal control over financial reporting during the quarter ended June 30, 2025[76](index=76&type=chunk) [Part II – Other Information](index=19&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, equity sales, other information, and exhibits [Item 1. Legal Proceedings](index=19&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The Partnership and its operating subsidiary are involved in routine legal and administrative proceedings, none of which are anticipated to have a material impact on their consolidated financial position, cash flows, or operating results - The Partnership and Dorchester Minerals Operating LP are involved in ordinary course legal and administrative proceedings, none of which are believed to have any material effect on consolidated financial position, cash flows, or operating results[78](index=78&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the Partnership's Annual Report on Form 10-K - There have been no material changes to the Partnership's risk factors as disclosed in its Annual Report[79](index=79&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=19&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details the purchases of common units by the Operating Partnership during the second quarter of 2025, specifically 10,000 units in April, for the purpose of satisfying equity awards under the Equity Incentive Program | Period | Total Number of Units Purchased | Average Price Paid per Unit | Total Number of Units Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Units that May Yet Be Purchased Under the Plans or Programs | | :----------------------------- | :------------------------------ | :-------------------------- | :---------------------------------------------------------------------------- | :---------------------------------------------------------------------------- | | April 1, 2025 – April 30, 2025 | 10,000 | $28.76 | 10,000 | 133,306 (1) | | May 1, 2025 – May 31, 2025 | - | N/A | - | 133,306 (1) | | June 1, 2025 – June 30, 2025 | - | N/A | - | 133,306 (1) | | Total | 10,000 | $28.76 | 10,000 | 133,306 (1) | - The purchases were open-market purchases by the Operating Partnership, an affiliate of the Partnership, pursuant to a Rule 10b5-1 plan to satisfy equity awards under the Equity Incentive Program[81](index=81&type=chunk) [Item 5. Other Information](index=20&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No executive officers or directors adopted or terminated any Rule 10b5-1 trading arrangements or Non-Rule 10b5-1 trading arrangements during the second quarter and six months ended June 30, 2025 - None of the executive officers or directors adopted or terminated any Rule 10b5-1 trading arrangements or Non-Rule 10b5-1 trading arrangements during the second quarter and six months ended June 30, 2025[83](index=83&type=chunk) [Item 6. Exhibits](index=21&type=section&id=ITEM%206.%20EXHIBITS) This section provides a comprehensive list of all exhibits filed with the Form 10-Q, including organizational documents, partnership agreements, and certifications, ensuring transparency and compliance with SEC regulations - The report includes various exhibits such as Certificate of Limited Partnership, Amended and Restated Agreement of Limited Partnership, and certifications of the Chief Executive Officer and Chief Financial Officer[84](index=84&type=chunk)[86](index=86&type=chunk) [Signatures](index=24&type=section&id=SIGNATURES) This section formally attests to the accuracy and completeness of the report through the signatures of the principal executive and financial officers - The report was signed by Bradley Ehrman, Chief Executive Officer, and Leslie Moriyama, Chief Financial Officer, on August 7, 2025[89](index=89&type=chunk)

Financial Performance - Dorchester Minerals, L.P. reported a net income of $12,347,000 for the quarter ended June 30, 2025, translating to $0.25 per common unit [1] - Operating revenues for the quarter were $32,395,000, a decrease from $37,360,000 in the same quarter of 2024 [1] - Net income for the first half of 2025 was $29,989,000, down from $41,795,000 in the first half of 2024 [1] Distribution Information - The Partnership declared a second quarter distribution of $0.620216 per common unit, payable on August 14, 2025, to common unitholders of record as of August 4, 2025 [1] Company Overview - Dorchester Minerals, L.P. is based in Dallas and owns producing and non-producing oil and natural gas mineral interests across 28 states [2] - The company's common units are traded on the NASDAQ Global Select Market under the symbol DMLP [2]

Market Overview - The current market is showing signs of concern due to global tariffs and job-related issues, with volatility increasing across various asset classes including stocks, currencies, and high-yield bonds [1][2][6] - The dollar is appreciating, and the yield premium for high-risk bonds relative to US Treasuries is rising modestly, indicating growing investor caution [6][8] Volatility and Market Trends - Historical data suggests that while the market has been bullish, the likelihood of a correction is increasing, particularly as the market has traded above the 20-day moving average for an extended period [9][10] - The upcoming seasonally weak period in the market is expected to contribute to increased volatility, with August and September typically being the weakest months [10][11] Energy Sector Insights - Dorchester Minerals LP (DMLP) is being targeted as a high-yield investment opportunity, capitalizing on the expected recovery in oil and gas prices, appealing to risk-tolerant investors [12][14] - The energy sector has seen rare dividend cuts, primarily affecting companies directly tied to energy prices, while overall supply and demand dynamics remain positive [13][16] - North American shale producers are maintaining discipline by aligning output and capital expenditure decisions with commodity price signals, which is expected to be a key theme in upcoming earnings calls [15][16]

[Filing Information](index=1&type=section&id=Filing%20Information) This section provides essential administrative and identification details for the Form 8-K filing [General Company and Filing Details](index=1&type=section&id=General%20Company%20and%20Filing%20Details) This section provides the foundational details of the Form 8-K filing, identifying Dorchester Minerals, L.P. as the registrant, specifying the filing date, and confirming its trading symbol and exchange - The registrant is **DORCHESTER MINERALS, L.P.**, a Delaware entity[1](index=1&type=chunk) - The report date is **July 24, 2025**[1](index=1&type=chunk) | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Units Representing Limited Partnership Interest | DMLP | NASDAQ Global Select Market | - The registrant is not an emerging growth company[3](index=3&type=chunk) [Financial Reporting and Disclosure](index=2&type=section&id=Financial%20Reporting%20and%20Disclosure) This section details the company's financial results and compliance with Regulation FD disclosure requirements [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) This item reports the announcement of Dorchester Minerals, L.P.'s cash distribution for the quarter ended June 30, 2025, through a press release attached as Exhibit 99.1 - The Registrant is furnishing a press release dated **July 24, 2025**, announcing its cash distribution for the quarter ended **June 30, 2025**[4](index=4&type=chunk) - The press release is attached as **Exhibit 99.1** and incorporated by reference[4](index=4&type=chunk) [Item 7.01 Regulation FD Disclosure](index=2&type=section&id=Item%207.01%20Regulation%20FD%20Disclosure) This section reiterates the disclosure of the cash distribution for the quarter ended June 30, 2025, via a press release, and specifies the limitations on its incorporation by reference - On **July 24, 2025**, the Registrant issued a press release announcing its cash distribution for the quarter ended **June 30, 2025**[5](index=5&type=chunk) - The press release (**Exhibit 99.1**) is furnished under this item and is not deemed 'filed' for **Section 18** purposes of the **Securities Exchange Act of 1934**, nor incorporated by reference into any filing under the **Securities Act of 1933**[5](index=5&type=chunk)[6](index=6&type=chunk) [Exhibits and Signatures](index=2&type=section&id=Exhibits%20and%20Signatures) This section lists all accompanying exhibits and provides the formal signature confirming the filing's authenticity [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This item lists the exhibits accompanying the Form 8-K, primarily the press release detailing the cash distribution and the interactive data file | Exhibits | | :------- | | 99.1 Press Release dated July 24, 2025, announcing the Registrant's cash distribution for the quarter ended June 30, 2025 | | 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) | [Signature](index=2&type=section&id=Signature) This section formally concludes the Form 8-K filing with the authorized signature of the registrant's Chief Financial Officer - The report was signed on behalf of **DORCHESTER MINERALS, L.P.** by **Leslie A. Moriyama**, Chief Financial Officer, on **July 24, 2025**[8](index=8&type=chunk)[9](index=9&type=chunk)

Acquisition and Assets - Dorchester Minerals, LP (DMLP) actively pursues accretive acquisition opportunities to enhance the value of its assets[8] - In Q3 2024, DMLP acquired 14,225 net royalty acres (NRA) in 14 counties within the Texas & New Mexico Permian Basin, with 65% in the Delaware Basin and 35% in the Midland Basin[15] - DMLP acquired 1,485 NRA in 2 counties and issued 505,369 units to contributors in the DJ Basin in Q1 2024[14] - DMLP acquired 1,204 NRA in 1 county and issued 530,000 units to a contributor in the DJ Basin in Q3 2024[14] - DMLP's Permian acquisition in Q3 2024 expands its inventory with minimal incremental general and administrative (G&A) expenses[15] - DMLP has 96,500 net mineral acres in the Permian Basin and 10,200 net mineral acres in Bakken/Three Forks[44] Financial Performance and Distributions - DMLP's trailing 12 months revenue was $44.9 million, with a net operating income of $27 million and an operating margin of 60%[28] - DMLP's trailing 3 months revenue was $10.1 million, with a net operating income of $5.6 million and an operating margin of 55%[28] - Royalties accounted for 78% of DMLP's revenue, NPI accounted for 14%, and other revenue accounted for 8%[20] - Management's LP interest is ~2X Management's GP interest[65] - In 2024, LP & GP distributions were $152.6 million, while Management LP & GP distributions were $134.8 million[65] Production and Reserves - DMLP's 2024 production replaced 179% of 2024 production[36] - DMLP's 2024 revisions were 3.7 MMBoe[36] - DMLP's 2024 acquisitions were 3.3 MMBoe[36] - Oil accounted for 86% of DMLP's net revenue by product, gas accounted for 10%, and NGL accounted for 4%[29] - From year-end 2023 to year-end 2024, DMLP's oil reserves increased by 33% from 8,318 MBOe to 11,069 MBOe[38] - From year-end 2023 to year-end 2024, DMLP's gas reserves increased by 7% from 33.4 Bcf to 35.6 Bcf[38]

Group 1 - Dorchester Minerals (NASDAQ: DMLP) announced a Q1 2025 distribution of approximately $0.726 per unit, which is about 2% lower than the Q4 2024 distribution [2] - The expectation for organic production is flat to slightly declining in the current oil pricing environment [2] - The article highlights the author's extensive experience in analytical roles and a focus on value opportunities and distressed plays, particularly in the energy sector [2]

Company Updates - Ron Trout has retired as an Independent Manager of Dorchester Minerals, L.P. after 17 years of service, with his term concluding after the 2025 Annual Meeting [1] - Sarah N. Wariner has been elected as the successor to Ron Trout as an Independent Manager, bringing experience from her roles at Jacobs Engineering Group and JP Morgan Chase & Co. [1] - The company is based in Dallas and owns producing and non-producing oil and natural gas mineral interests across 28 states, with its common units trading on NASDAQ under the symbol DMLP [1]

[Filing Information](index=1&type=section&id=Filing%20Information) This section details Dorchester Minerals, L.P.'s Form 10-Q filing for Q1 2025, confirming SEC compliance and non-shell status [Form 10-Q Details](index=1&type=section&id=Form%2010-Q%20Details) This section details Dorchester Minerals, L.P.'s Form 10-Q filing for Q1 2025, confirming SEC compliance and non-shell status - The report is a Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the period ended March 31, **2025**[1](index=1&type=chunk) - Dorchester Minerals, L.P. (DMLP) is a Delaware limited partnership, with its common units traded on the NASDAQ Global Select Market[1](index=1&type=chunk)[2](index=2&type=chunk)[3](index=3&type=chunk) - The registrant has filed all required reports during the preceding **12 months** and has been subject to filing requirements for the past **90 days**. It has also submitted all required Interactive Data Files[3](index=3&type=chunk) - The registrant is not a shell company, and the number of **common units outstanding** as of May 8, **2025**, was **47,339,756**[4](index=4&type=chunk) [Disclosure Regarding Forward-Looking Statements](index=4&type=section&id=DISCLOSURE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section highlights forward-looking statements, cautioning that actual results may differ due to various risks including commodity prices and geopolitical events [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section highlights forward-looking statements, cautioning that actual results may differ due to various risks including commodity prices and geopolitical events - Statements in the report that are not historical facts are considered forward-looking, identified by words like 'may,' 'believe,' 'will,' 'expect,' 'anticipate,' and 'estimate'[8](index=8&type=chunk) - These statements are based on management's current plans and expectations but involve risks and uncertainties, meaning actual results could differ materially[9](index=9&type=chunk) - Key reasons for potential differences include changes in oil and natural gas prices/demand, public health crises, conflicts in Ukraine and the Middle East, operational changes, economic conditions, and regulatory requirements[9](index=9&type=chunk) - Investors are advised to review 'Item 1A – Risk Factors' in the Annual Report on Form 10-K and this Quarterly Report, as these risks could substantially harm the business and lead to a decline in common unit trading price[9](index=9&type=chunk)[10](index=10&type=chunk) [Part I – Financial Information](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents Dorchester Minerals, L.P.'s unaudited condensed consolidated financial statements and management's discussion for Q1 2025 [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Dorchester Minerals, L.P.'s unaudited condensed consolidated financial statements and accompanying notes for Q1 2025 [Condensed Consolidated Balance Sheets](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheets show a decrease in total assets and partnership capital from December 2024 to March 2025, with a slight increase in total liabilities Condensed Consolidated Balance Sheet Highlights (In Thousands) | Item | March 31, 2025 | December 31, 2024 | Change | % Change | | :---------------------------------- | :------------- | :---------------- | :----- | :------- | | Cash and cash equivalents | $41,545 | $42,508 | $(963) | (2.26)% | | Total current assets | $68,461 | $67,832 | $629 | 0.93% | | Oil and natural gas properties (net) | $279,673 | $298,011 | $(18,338) | (6.15)% | | Total assets | $349,038 | $366,812 | $(17,774) | (4.85)% | | Total liabilities | $5,903 | $5,024 | $879 | 17.49% | | Total partnership capital | $343,135 | $361,788 | $(18,653) | (5.16)% | [Condensed Consolidated Income Statements](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20INCOME%20STATEMENTS) Q1 2025 saw increased operating revenues but a slight net income decrease due to higher costs, particularly depreciation and depletion Condensed Consolidated Income Statement Highlights (Three Months Ended March 31, In Thousands, except per unit amounts) | Item | 2025 | 2024 | Change | % Change | | :---------------------------------- | :----- | :----- | :----- | :------- | | Royalties | $37,830 | $24,877 | $12,953 | 52.07% | | Net profits interest | $4,793 | $5,598 | $(805) | (14.38)% | | Total operating revenues | $43,164 | $30,979 | $12,185 | 39.33% | | Total costs and expenses | $25,522 | $12,812 | $12,710 | 99.20% | | Net income | $17,642 | $18,167 | $(525) | (2.89)% | | Net income per common unit | $0.36 | $0.44 | $(0.08) | (18.18)% | | Weighted average common units outstanding | 47,340 | 39,605 | 7,735 | 19.53% | [Condensed Consolidated Statements of Changes in Partnership Capital](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20PARTNERSHIP%20CAPITAL) Partnership capital decreased in Q1 2025 due to distributions, while Q1 2024 saw an increase from net income and unit acquisitions Changes in Partnership Capital (Three Months Ended March 31, In Thousands) | Item | March 31, 2025 | January 1, 2025 | March 31, 2024 | January 1, 2024 | | :------------------------------------------ | :------------- | :-------------- | :------------- | :-------------- | | Balance at period start | $361,788 | $361,788 | $185,557 | $185,557 | | Net income | $17,642 | - | $18,167 | - | | Acquisitions for common units | - | - | $17,041 | - | | Distributions | $(36,295) | - | $(41,412) | - | | Balance at period end | $343,135 | $361,788 | $179,353 | $185,557 | - Distributions **per common unit** decreased from **$1.007874** in Q1 **2024** to **$0.739412** in Q1 **2025**[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Operating cash flow increased in Q1 2025, but significant distributions led to a net decrease in cash and cash equivalents for the current quarter Condensed Consolidated Cash Flow Highlights (Three Months Ended March 31, In Thousands) | Item | 2025 | 2024 | Change | % Change | | :------------------------------------------ | :----- | :----- | :----- | :------- | | Net cash provided by operating activities | $33,394 | $27,967 | $5,427 | 19.41% | | Net cash contributed in acquisitions | $1,938 | $4,157 | $(2,219) | (53.38)% | | Distributions paid | $(36,295) | $(41,412) | $5,117 | (12.36)% | | Decrease in cash and cash equivalents | $(963) | $(9,288) | $8,325 | (89.63)% | | Cash and cash equivalents at end of period | $41,545 | $37,737 | $3,808 | 10.09% | - Non-cash investing activities included the issuance of common units for oil and natural gas property acquisitions, **valued at $17.0 million** in Q1 **2024**, with no such activity in Q1 **2025**[23](index=23&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=NOTES%20TO%20THE%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes provide essential context for the financial statements, covering business, accounting policies, acquisitions, and distributions [1. Business and Basis of Presentation](index=9&type=section&id=1.%20Business%20and%20Basis%20of%20Presentation) The Partnership acquires and administers Royalty Properties and NPI across 28 states, with unaudited financials prepared under U.S. GAAP - The Partnership's business involves the acquisition, ownership, and administration of Royalty Properties (producing and nonproducing mineral, royalty, overriding royalty, net profits, and leasehold interests) in **594 counties** and parishes across **28 states**, and net profits overriding royalty interests (NPI)[25](index=25&type=chunk) - The financial statements are unaudited, prepared under U.S. GAAP and SEC rules, and include normal and recurring adjustments; interim results are not necessarily indicative of calendar year results[26](index=26&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section details accounting estimates and recent pronouncements, including the adoption of ASU 2023-07 and evaluation of ASU 2024-03 - The preparation of financial statements requires management to make estimates and assumptions, which are evaluated on an ongoing basis[28](index=28&type=chunk) - The Partnership adopted ASU **2023-07**, 'Segment Reporting,' for its fiscal year **2024** annual and interim financial statements, applying it retrospectively[29](index=29&type=chunk) - Management is currently evaluating ASU **2024-03**, 'Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures,' effective for annual periods beginning after December **15**, **2026**, to determine its impact[30](index=30&type=chunk) [3. Acquisitions for Common Units](index=11&type=section&id=3.%20Acquisitions%20for%20Common%20Units) In 2024, the Partnership acquired mineral and royalty interests in New Mexico, Texas, and Colorado by issuing common units - On September **30**, **2024**, the Partnership acquired approximately **14,225 net mineral acres** in New Mexico and Texas for **6,721,144 common units valued at $202.6 million**[32](index=32&type=chunk) - Also on September **30**, **2024**, royalty interests **totaling approximately 1,204 net royalty acres** in Weld County, Colorado, were acquired for **530,000 common units valued at $16.0 million**[33](index=33&type=chunk) - On March **28**, **2024**, mineral interests **totaling approximately 1,485 net royalty acres** in Colorado were acquired for **505,369 common units valued at $17.0 million**, plus **$4.0 million** in contributed cash[34](index=34&type=chunk) [4. Commitments and Contingencies](index=11&type=section&id=4.%20Commitments%20and%20Contingencies) Routine legal and administrative proceedings are not expected to significantly impact the Partnership's financial position or results - The Partnership and Dorchester Minerals Operating LP are involved in ordinary course legal and administrative proceedings[35](index=35&type=chunk) - These proceedings are not expected to have a significant effect on consolidated financial position, cash flows, or operating results[35](index=35&type=chunk) [5. Distributions to Holders of Common Units](index=11&type=section&id=5.%20Distributions%20to%20Holders%20of%20Common%20Units) A cash distribution of $0.725835 per common unit for Q1 2025 was announced, with the next distribution due by August 14, 2025 - A cash distribution of **$0.725835 per common unit** for Q1 **2025** was announced on April **24**, **2025**, payable May **15**, **2025**[36](index=36&type=chunk) - The partnership agreement requires the next cash distribution to be paid by August **14**, **2025**[36](index=36&type=chunk) [6. Segment Reporting](index=11&type=section&id=6.%20Segment%20Reporting) The Partnership operates as a single segment, with the CEO assessing performance and allocating resources based on consolidated Net income - The Partnership manages its business activities on a consolidated basis and operates in a single operating and reportable segment[37](index=37&type=chunk) - The CEO uses Net income from the Condensed Consolidated Income Statements to assess financial performance and allocate resources[38](index=38&type=chunk) - Disaggregated operating revenues and significant segment expenses are presented separately on the income statements, with no other significant segment items requiring disclosure[38](index=38&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=13&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Q1 2025 financial condition and results, covering business overview, commodity risks, tariffs, operations, and liquidity [Overview](index=13&type=section&id=Overview) The Partnership owns Royalty Properties and a 96.97% Net Profits Interest (NPI) across 28 states, with the NPI in a surplus position - The Partnership owns Royalty Properties in **594 counties** and parishes in **28 states**[41](index=41&type=chunk) - The Partnership holds a Net Profits Interest (NPI) in properties of Dorchester Minerals Operating LP, receiving **96.97%** of monthly net profits[42](index=42&type=chunk) - As of March **31**, **2025**, the NPI was in a surplus position with **$3.0 million** in cash on hand for outstanding capital commitments, primarily in the Bakken region[43](index=43&type=chunk) [Commodity Price Risks](index=13&type=section&id=Commodity%20Price%20Risks) Profitability is highly sensitive to fluctuating oil and natural gas prices, influenced by global supply, demand, and geopolitical factors - Oil and natural gas prices, driven by global supply and demand, fluctuate significantly due to factors like geopolitical conflicts (Ukraine, Middle East), interest rates, and OPEC+ actions[44](index=44&type=chunk)[45](index=45&type=chunk) - As a royalty owner and non-operator, the Partnership has limited access to information and no operational control over production volumes or sales terms[44](index=44&type=chunk) [Tariffs and Trading Relationships](index=13&type=section&id=Tariffs%20and%20Trading%20Relationships) Tariffs and trade uncertainties may impact raw material costs and global oil markets, with the ultimate effect on the Partnership remaining unclear - U.S. government tariffs and potential retaliatory tariffs from foreign jurisdictions create uncertainty regarding economic conditions, raw material costs, and inflation[46](index=46&type=chunk) - Global oil markets are contending with tariff impacts, geopolitical tensions, and evolving OPEC+ production strategies, leading oil producers to evaluate various scenarios[47](index=47&type=chunk) - Larger, well-capitalized producers are better positioned to withstand a broader range of commodity prices[47](index=47&type=chunk) [Results of Operations](index=15&type=section&id=Results%20of%20Operations) Q1 2025 results show increased Royalty Properties volumes and prices, decreased NPI volumes, higher costs, and a slight net income decrease [Acquisitions for Common Units (Results of Operations Context)](index=15&type=section&id=Acquisitions%20for%20Common%20Units%20(Results%20of%20Operations%20Context)) This section reiterates 2024 acquisitions of mineral and royalty interests in New Mexico, Texas, and Colorado via common unit exchanges - On September **30**, **2024**, the Partnership acquired approximately **14,225 net mineral acres** in New Mexico and Texas for **6,721,144 common units** (**$202.6 million**)[48](index=48&type=chunk) - Also on September **30**, **2024**, **1,204 net royalty acres** in Weld County, Colorado, were acquired for **530,000 common units** (**$16.0 million**)[49](index=49&type=chunk) - On March **28**, **2024**, **1,485 net royalty acres** in Colorado were acquired for **505,369 common units** (**$17.0 million**) and **$4.0 million** in cash[50](index=50&type=chunk) [Three Months Ended March 31, 2025 as compared to Three Months Ended March 31, 2024](index=16&type=section&id=Three%20Months%20Ended%20March%2031%2C%202025%20as%20compared%20to%20Three%20Months%20Ended%20March%2031%2C%202024) Q1 2025 saw increased Royalty Properties volumes and natural gas prices, decreased NPI volumes, higher costs, and a slight net income decline Accrual Basis Sales Volumes (Three Months Ended March 31) | Item | 2025 | 2024 | % Change | | :-------------------------------- | :--- | :--- | :------- | | Royalty Properties natural gas sales (mmcf) | 1,482 | 1,268 | 17% | | Royalty Properties oil sales (mbbls) | 518 | 343 | 51% | | NPI natural gas sales (mmcf) | 436 | 489 | (11)% | | NPI oil sales (mbbls) | 136 | 176 | (23)% | Accrual Basis Average Sales Prices (Three Months Ended March 31) | Item | 2025 | 2024 | % Change | | :-------------------------------- | :----- | :----- | :------- | | Royalty Properties natural gas sales ($/mcf) | $3.51 | $1.62 | 117% | | Royalty Properties oil sales ($/bbl) | $63.00 | $66.59 | (5)% | | NPI natural gas sales ($/mcf) | $3.91 | $1.52 | 157% | | NPI oil sales ($/bbl) | $61.33 | $66.39 | (8)% | - Operating costs, including production taxes, **increased 70%** due to higher sales revenue, volumes, and ad valorem taxes[56](index=56&type=chunk) - Depreciation, depletion, and amortization **increased 142%**, primarily due to changes in estimated proved developed producing reserves and recent acquisitions[57](index=57&type=chunk) - General and administrative expenses **increased 32%** due to higher legal/professional fees, regulatory filing fees (S-4 registration), and compensation expenses[58](index=58&type=chunk) - Net cash provided by operating activities **increased 19%** due to higher Royalty Properties revenue receipts, partially offset by lower NPI payments and increased G&A expenses[59](index=59&type=chunk) - Average realized prices for Royalty Properties cash receipts in Q1 **2025** were **$63.00/bbl** for oil and **$2.19/mcf** for natural gas[61](index=61&type=chunk) - For NPI, they were **$58.83/bbl** for oil and **$1.97/mcf** for natural gas[62](index=62&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) Primary capital sources are Royalty Properties and NPI cash flows, with liquidity expected to be sufficient despite market volatility and debt limitations - Primary capital sources are cash flows from Royalty Properties and NPIs, with quarterly distributions mandated after expenses and reserves[63](index=63&type=chunk) - The Partnership leases its office space through an operating lease expiring in **2029**, with total lease payments of **$1,457 thousand** and a total lease obligation of **$974 thousand** as of March **31**, **2025**[64](index=64&type=chunk) - The partnership agreement prohibits indebtedness (excluding trade payables) exceeding **$50,000** to avoid unrelated business taxable income[65](index=65&type=chunk) - Despite global military conflicts, inflation, and interest rates, the Partnership expects sufficient liquidity for distributions and operations, but acknowledges that market conditions and geopolitical factors could impact future cash flows[66](index=66&type=chunk)[67](index=67&type=chunk) - Cash and cash equivalents decreased slightly from **$42.5 million** at December **31**, **2024**, to **$41.5 million** at March **31**, **2025**[68](index=68&type=chunk) [Critical Accounting Policies and Estimates](index=19&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) No significant changes to critical accounting policies and estimates were reported since the December 31, 2024 Annual Report - No significant changes to critical accounting policies and estimates were reported as of March **31**, **2025**, compared to the Annual Report for December **31**, **2024**[69](index=69&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=20&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No significant changes in market risk exposure occurred in Q1 2025, with detailed discussion available in the Annual Report - No significant changes in market risk exposure occurred during the three months ended March **31**, **2025**[71](index=71&type=chunk) - For a detailed discussion of market risk, refer to Item 7A of Part II of the Partnership's Annual Report for the year ended December **31**, **2024**[71](index=71&type=chunk) [Item 4. Controls and Procedures](index=20&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Disclosure controls were effective as of March 31, 2025, with no material changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=20&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Disclosure controls and procedures were evaluated and deemed effective by principal officers as of March 31, 2025 - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of March **31**, **2025**[72](index=72&type=chunk) [Changes in Internal Control](index=20&type=section&id=Changes%20in%20Internal%20Control) No material changes in internal control over financial reporting occurred during Q1 2025 - No material changes in internal control over financial reporting occurred during the quarter ended March **31**, **2025**[73](index=73&type=chunk) [Part II – Other Information](index=20&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, equity security sales, other information, and exhibits for the reporting period [Item 1. Legal Proceedings](index=20&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Routine legal and administrative proceedings are not expected to significantly impact the Partnership's financial position or results - The Partnership and Operating Partnership are involved in legal and administrative proceedings in the ordinary course of business[75](index=75&type=chunk) - None of these proceedings are believed to have any significant effect on consolidated financial position, cash flows, or operating results[75](index=75&type=chunk) [Item 1A. Risk Factors](index=20&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to the Partnership's risk factors were reported since the December 31, 2024 Annual Report - No material changes to the Partnership's risk factors were reported as of March **31**, **2025**, compared to the Annual Report for December **31**, **2024**[76](index=76&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=20&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The Operating Partnership purchased 14,335 common units in Q1 2025 under a Rule 10b5-1 plan for equity awards Issuer Purchases of Equity Securities (Three Months Ended March 31, 2025) | Period | Total Number of Units Purchased | Average Price Paid per Unit | Total Number of Units Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Units that May Yet Be Purchased Under the Plans or Programs | | :----------------------------------- | :------------------------------ | :-------------------------- | :----------------------------------------------------------------------------- | :----------------------------------------------------------------------------- | | January 1, 2025 – January 31, 2025 | 7,500 | $31.69 | 7,500 | 150,141 | | February 1, 2025 – February 28, 2025 | 6,835 | $30.91 | 6,835 | 143,306 | | March 1, 2025 – March 31, 2025 | - | N/A | - | 143,306 | | Total | 14,335 | $31.32 | 14,335 | 143,306 | - Purchases were made by the Operating Partnership, an affiliate, via a Rule **10b5-1** plan adopted November **5**, **2024**, to satisfy equity awards under the Equity Incentive Program[77](index=77&type=chunk) - The maximum number of common units that can be granted under the Equity Incentive Program each fiscal year is **0.333%** of outstanding common units at the beginning of the fiscal year, **totaling 157,641 units** in **2025**[77](index=77&type=chunk) [Item 5. Other Information](index=21&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No executive officers or directors adopted or terminated Rule 10b5-1 trading plans during Q1 2025 - No executive officers or directors adopted or terminated Rule **10b5-1** trading plans during the three months ended March **31**, **2025**[79](index=79&type=chunk) [Item 6. Exhibits](index=22&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including organizational documents, certifications, and XBRL data - The exhibits include organizational documents such as Certificates of Limited Partnership and Amended and Restated Agreements of Limited Partnership for Dorchester Minerals, L.P. and its affiliates[80](index=80&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer (pursuant to Rule **13a-14(a)**/**15d-14(a)** and **18** U.S.C. Sec. **1350**) are filed or furnished[80](index=80&type=chunk) - XBRL Instance Document and Taxonomy Extension documents (Schema, Calculation, Definition, Label, Presentation Linkbase) are included for interactive data filing[82](index=82&type=chunk) [Signatures](index=25&type=section&id=SIGNATURES) This section contains the duly authorized signatures of Dorchester Minerals, L.P.'s CEO and CFO for the May 8, 2025 filing [Signatures](index=25&type=section&id=Signatures) This section contains the duly authorized signatures of Dorchester Minerals, L.P.'s CEO and CFO for the May 8, 2025 filing - The report is signed by Bradley Ehrman, Chief Executive Officer, and Leslie Moriyama, Chief Financial Officer, on May **8**, **2025**[85](index=85&type=chunk)

Cash Distribution - Dorchester Minerals, L.P. announced its cash distribution for the quarter ended March 31, 2025[4]. - The press release detailing the cash distribution was issued on April 24, 2025[5]. Financial Reporting - The financial results and operational conditions are referenced in the attached press release as Exhibit 99.1[6]. - The report was signed by Leslie A. Moriyama, Chief Financial Officer, on April 24, 2025[9]. Company Information - The company is registered under the NASDAQ Global Select Market with the trading symbol DMLP[2].