In the latest close session, TXO Partners LP (TXO) was up +2.2% at $13.02. The stock outperformed the S&P 500, which registered a daily loss of 0.37%. At the same time, the Dow lost 0.18%, and the tech-heavy Nasdaq lost 0.84%. Coming into today, shares of the company had gained 0.24% in the past month. In that same time, the Oils-Energy sector gained 8.79%, while the S&P 500 lost 3.7%. The upcoming earnings release of TXO Partners LP will be of great interest to investors. The company's earnings per share ( ...

Core Viewpoint - TXO Partners, L.P. has entered into asset sale agreements through its joint venture, Cross Timbers Energy, LLC, to sell oil and gas properties valued at approximately $200 million, which will significantly impact its asset portfolio and future operations [1] Group 1: Asset Sale Details - Cross Timbers Energy, LLC, in which TXO holds a 50% interest, has executed purchase and sale agreements with multiple private buyers for oil and gas properties totaling around $200 million [1] - If completed, these asset sales will represent substantially all of the assets owned by Cross Timbers [1] - TXO expects to receive approximately $100 million in net proceeds from these sales, subject to customary purchase price adjustments [1] Group 2: Future Financial Plans - A portion of the proceeds from the asset sales will be allocated to pay a $70 million deferred payment for the 2025 acquisition of assets from White Rock Energy, LLC, due on July 31, 2026 [1] - The transactions are anticipated to close in the second quarter of 2026, pending customary closing conditions [1] Group 3: Operational Focus - Post-transaction, TXO's operations will concentrate on the Williston Basin, San Juan Basin, and the Vacuum and Parker fields in the Permian Basin [1] - TXO Partners, L.P. is a master limited partnership focused on the acquisition, development, optimization, and exploitation of conventional oil, natural gas, and natural gas liquids reserves in North America [1]

分组1 - TXO Partners LP reported a quarterly loss of $0.57 per share, significantly below the Zacks Consensus Estimate of $0.10, marking an earnings surprise of -700% compared to earnings of $0.26 per share a year ago [1] - The company posted revenues of $125.93 million for the quarter ended December 2025, exceeding the Zacks Consensus Estimate by 13.36%, and showing an increase from year-ago revenues of $89.33 million [2] - TXO Partners LP shares have increased approximately 17.5% since the beginning of the year, outperforming the S&P 500's gain of 1.5% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $109 million, while for the current fiscal year, the estimate is $0.50 on revenues of $458.32 million [7] - The Zacks Industry Rank indicates that the Energy and Pipeline - Master Limited Partnerships sector is currently in the bottom 15% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Reserves and Production - As of December 31, 2025, the company had total estimated proved reserves of approximately 129 million barrels of oil equivalent (MMBoe), with about 60% being liquids and 80% proved developed[33]. - The company produced an average of 28,268 barrels of oil equivalent (Boe) per day in 2025, with approximately 72% of this production coming from assets operated by the company[33]. - In 2025, the company acquired a total of 273,625 gross leasehold and mineral acres in the Williston Basin, with an additional 178,133 acres acquired in 2026[41]. - The company expects to focus over 65% of its drilling and recompletion work in 2026 on Williston Basin assets, with an estimated base decline rate of approximately 20%[42]. - For the year ended December 31, 2025, consolidated revenues were derived 70% from oil, 21% from natural gas, and 9% from NGL revenues, with total average production of 28,268 Boe/d[43]. - Average production in the Williston Basin for 2025 was 7,602 Boe/d, comprising approximately 74% oil, 12% natural gas, and 14% NGLs[45]. - Total production in 2025 was 10,318 MBoe, a decrease from 8,559 MBoe in 2024 and 8,397 MBoe in 2023[67]. - The company operated wells responsible for approximately 72% of its production for the year ended December 31, 2025, compared to 66% for the year ended December 31, 2024[77]. Financial Performance and Capital Expenditure - The company completed the acquisition of oil and gas assets from White Rock Energy, LLC for cash consideration of $331.6 million in July 2025, including a deferred payment of $70 million due on July 31, 2026[31]. - The development budget for 2026 is approximately $70 million, primarily funded by cash flow from operating activities[30]. - The company incurred $71.1 million in development capital in 2025 and expects to incur approximately $70 million for development in 2026[46]. - The company plans to fund its 2026 capital development programs from cash flow from operations, reflecting an increase in the capital program from $28.0 million in 2024 to $71.1 million in 2025[48]. - The standardized measure of proved reserves as of December 31, 2025, was $1,095.5 million, with a PV-10 value of $1,158.9 million[50]. Drilling and Development Plans - The company expects to drill or participate in the drilling of approximately 14 gross wells in the Permian Basin and 22 gross wells in the San Juan Basin in 2026[36][40]. - The company drilled or participated in 11 gross wells in the Permian Basin in 2025 and plans to drill approximately 14 gross wells in 2026[63]. - The company anticipates drilling and completing approximately 19 PUD locations in 2026, with projected future development costs totaling $220.8 million from 2026 to 2030[64]. - The company expects to drill approximately 9 gross wells in the Williston Basin during 2026, following 11 gross wells drilled in 2025[63]. Market and Revenue Sources - Chevron USA, Gunvor USA, and Plains All American accounted for more than 42% of total revenues for the year ended December 31, 2025, excluding the impact of commodity derivatives[87]. - Cross Timbers, a joint venture, represented approximately 18% of the company's revenues and proved reserves for the year ended December 31, 2025, with anticipated net proceeds of approximately $40 million from pending transactions expected to close in Q2 2026[80]. - The company earned management fees from Cross Timbers of $5.2 million for the year ended December 31, 2025, compared to $5.1 million for the year ended December 31, 2024[82]. Regulatory and Compliance Issues - The company is subject to various regulations that may limit the amount of oil and natural gas that can be produced, impacting overall production economics[101]. - The Federal Energy Regulatory Commission (FERC) regulates interstate natural gas pipeline transportation rates, which may affect marketing and revenue from natural gas sales[106]. - The company is subject to stringent environmental regulations that may impose substantial liabilities for pollution resulting from drilling and production operations[116]. - The company faces potential civil penalties for violations of market manipulation laws, with fines reaching up to approximately $1,496,035 per violation per day[107]. - The regulatory burden on the oil and natural gas industry increases operational costs, potentially affecting profitability[118]. - The company is required to observe anti-market manipulation laws, with civil penalties for violations potentially reaching up to $1,496,035 per day[107]. Environmental and Operational Risks - The company believes that extreme weather conditions could adversely affect drilling activities and production levels[99]. - Seasonal demand for natural gas typically decreases in summer and increases in winter, which may affect quarterly operational results[98]. - The company faces intense competition in the oil and natural gas industry, competing with larger companies that have greater resources[90]. - The company maintains insurance against risks associated with contamination from exploration and production activities, but there is no assurance that such insurance will remain commercially available[155]. - The company is focused on attracting and retaining top talent, providing training and career development opportunities to enhance employee well-being[157].

Core Viewpoint - TXO Partners LP is anticipated to report a year-over-year decline in earnings despite an increase in revenues, which could significantly influence its stock price depending on the actual results compared to estimates [1][2]. Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $0.10 per share, reflecting a year-over-year decrease of 61.5%. Revenues are projected to be $111.09 million, representing a 24.4% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 75% higher in the last 30 days, indicating a positive reassessment by analysts regarding the company's earnings prospects [4]. Earnings Surprise Prediction - The Most Accurate Estimate for TXO Partners LP is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +57.90%. This suggests a strong likelihood of beating the consensus EPS estimate, although the stock currently holds a Zacks Rank of 3 [12]. Historical Performance - In the last reported quarter, TXO Partners LP exceeded the expected earnings of $0.01 per share by delivering $0.08, resulting in a surprise of +700.00%. Over the past four quarters, the company has beaten consensus EPS estimates twice [13][14]. Conclusion - TXO Partners LP is viewed as a compelling candidate for an earnings beat, but investors are advised to consider additional factors beyond earnings expectations when making investment decisions [17].

Core Insights - TXO Partners, L.P. offers a unique approach to gaining exposure in the energy sector with potentially lower volatility due to its focus on developed drilling locations [1] Company Overview - TXO Partners, L.P. is positioned in the energy sector, emphasizing stability by investing in already developed drilling sites, which mitigates the risks associated with initial drilling phases [1] Analyst Background - The analyst has over a decade of experience in financial markets, primarily in hedge funds, and has recently expanded their focus to include the energy and minerals sectors, recognizing their growth potential [1]

Company Performance - TXO Partners LP (TXO) closed at $10.15, reflecting a decrease of -2.78% from the previous day's closing price, which is less than the S&P 500's daily loss of 0.34% [1] - Over the past month, TXO's shares have declined by 13.36%, underperforming the Oils-Energy sector's loss of 1.8% and the S&P 500's gain of 1.19% [1] Earnings Estimates - TXO is projected to report earnings of $0.09 per share, indicating a year-over-year decline of 65.38%, with anticipated revenue of $111.72 million, representing a 25.06% increase from the same quarter last year [2] - For the full year, analysts expect earnings of $0.07 per share and revenue of $386.8 million, marking changes of -89.23% and 0% respectively from the previous year [3] Analyst Sentiment - Recent changes to analyst estimates for TXO should be noted, as they reflect evolving short-term business trends, with positive revisions indicating analyst optimism regarding the business and profitability [4] - The Zacks Rank system, which assesses these estimate changes, currently gives TXO a rank of 3 (Hold), indicating a neutral outlook [6] Valuation Metrics - TXO is trading at a Forward P/E ratio of 25.16, which is a premium compared to the industry average Forward P/E of 11.43 [7] - The Energy and Pipeline - Master Limited Partnerships industry, part of the Oils-Energy sector, holds a Zacks Industry Rank of 23, placing it in the top 10% of over 250 industries [7]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on TXO Partners LP (TXO), and emphasizes the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank for making informed investment decisions [1][5]. Group 1: Brokerage Recommendations for TXO - TXO Partners LP has an average brokerage recommendation (ABR) of 1.50, indicating a consensus between Strong Buy and Buy, with 75% of the recommendations being Strong Buy from four brokerage firms [2][5]. - Despite the positive ABR, the article cautions against making investment decisions solely based on this metric, as studies show limited success of brokerage recommendations in predicting stock price increases [5][11]. Group 2: Limitations of Brokerage Recommendations - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings due to vested interests, issuing five "Strong Buy" recommendations for every "Strong Sell" [6][11]. - The article suggests that brokerage recommendations may not align with retail investors' interests and often do not accurately indicate future stock price movements [7][11]. Group 3: Zacks Rank as an Alternative - The Zacks Rank is presented as a more reliable indicator of near-term stock price performance, driven by earnings estimate revisions, and is classified into five groups from Strong Buy to Strong Sell [8][12]. - Unlike the ABR, the Zacks Rank is timely and reflects the latest earnings estimates, making it a better tool for predicting future price movements [13]. Group 4: Current Performance of TXO - The Zacks Consensus Estimate for TXO Partners LP remains unchanged at $0.07 for the current year, indicating steady analyst views on the company's earnings prospects [14]. - Due to the unchanged consensus estimate and other factors, TXO has a Zacks Rank of 3 (Hold), suggesting caution despite the Buy-equivalent ABR [15].

Core Viewpoint - Investors in TXO Partners, L.P. should closely monitor the stock due to significant movements in the options market, particularly the high implied volatility of the Jan 16, 2026 $7.5 Call option [1] Group 1: Implied Volatility - Implied volatility indicates the market's expectation of future price movement, with high levels suggesting anticipation of a significant price change or an upcoming event that could trigger a rally or sell-off [2] - The current high implied volatility for TXO Partners may signal a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay [4] Group 2: Analyst Insights - TXO Partners holds a Zacks Rank of 3 (Hold) within the Energy and Pipeline - Master Limited Partnerships industry, which is positioned in the top 44% of the Zacks Industry Rank [3] - Over the past 60 days, one analyst has raised the earnings estimate for the current quarter from 8 cents per share to 9 cents, with no downward revisions from other analysts [3]

Operations and Market Focus - The company operates primarily in the Permian Basin, San Juan Basin, and Williston Basin, focusing on the acquisition and development of oil and natural gas reserves[102]. - The oil and natural gas industry remains cyclical, with commodity prices subject to significant fluctuations due to various external factors[105]. - The company faces risks related to commodity price volatility, regulatory changes, and geopolitical issues that could impact operations and financial performance[103]. Market Conditions and Price Volatility - From January 1, 2024, to September 30, 2025, NYMEX crude oil prices peaked at $86.91 per Bbl and fell to $57.52 per Bbl by October 20, 2025, while natural gas prices reached a high of $4.49 per MMBtu before declining to $3.40 per MMBtu[105]. - The company anticipates continued volatility in crude oil and natural gas markets, which will significantly impact revenue and profitability[106]. Financial Performance - Total revenues increased by $32.1 million, or 47%, from $68.7 million in Q3 2024 to $100.9 million in Q3 2025, driven by a production increase of 521 MBoe and a 34% rise in average selling price of natural gas[124]. - Net income for Q3 2025 was $4.352 million, a significant increase from $203,000 in Q3 2024[120]. - Adjusted EBITDAX rose to $32.75 million in Q3 2025, compared to $20.16 million in Q3 2024, reflecting improved operational performance[120]. - Revenues increased by $81.6 million, or 42%, from $193.5 million in 2024 to $275.1 million in 2025, driven by a 1,210 MBoe increase in production and a 33% rise in average selling price of natural gas[140]. Operating Costs and Expenses - Inflationary pressures have increased operating costs, particularly for steel, chemicals, transportation, and wages, with no short-term reversal expected[107]. - Production expenses increased by $8.4 million, or 21%, from $39.4 million in Q3 2024 to $47.9 million in Q3 2025, primarily due to acquisitions in the Williston Basin[125]. - Total expenses for Q3 2025 were $97.116 million, compared to $73.697 million in Q3 2024, reflecting increased operational costs[120]. - General and administrative expenses increased by $1.6 million, or 48%, from $3.3 million in Q3 2024 to $4.8 million in Q3 2025, mainly due to higher personnel costs[132]. Cash Flow and Capital Expenditures - Cash available for distribution was $7.543 million in Q3 2025, down from $16.567 million in Q3 2024[120]. - Capital expenditures, including acquisitions, totaled $305.4 million for the nine months ended September 30, 2025, compared to $273.0 million in 2024[157]. - Net cash provided by operating activities increased by $16.9 million, reaching $85.7 million in 2025 compared to $68.8 million in 2024, attributed to improved operating results[163]. Debt and Financing - Outstanding borrowings under the Credit Facility increased from $150.0 million at December 31, 2024, to $264.0 million at September 30, 2025[153]. - The weighted average interest rate on Credit Facility borrowings was 8.0% for the nine months ended September 30, 2025[169]. - The company entered into Amendment No. 5 to its Credit Facility on July 31, 2025, increasing the borrowing base from $275 million to $410 million and extending the maturity date to August 30, 2029[166]. Production and Sales Volumes - Total sales volumes for the nine months ended September 30, 2025, reached 7,322 MBoe, compared to 6,112 MBoe in 2024, representing a daily average increase from 22 MBoe/d to 27 MBoe/d[140]. - Average sales price for oil and condensate decreased by 15% from $77.17 per Bbl in 2024 to $67.30 per Bbl in 2025, while natural gas prices increased from $1.75 per Mcf to $2.94 per Mcf[140]. Future Outlook and Strategic Plans - The company plans to dynamically allocate funds to maximize economic returns, support acquisition opportunities, and manage debt repayment[106]. - The company is actively working with suppliers to mitigate inflationary pressures and ensure the availability of critical supplies[108].