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].

Core Points - TXO Partners, L.P. announced a distribution of $0.35 per common unit for the quarter ended September 30, 2025 [1] - The distribution will be paid on November 21, 2025, to eligible unitholders of record as of the close of trading on November 14, 2025 [1] - TXO Partners positions itself as a unique opportunity in the energy sector with a durable distribution strategy [1]

Disclaimer and Forward-Looking Statements This presentation contains "forward-looking" statements, as defined under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements other than statements of historical facts contained in this presentation, including statements regarding our d ...

Core Insights - TXO Partners LP (TXO) is expected to report flat earnings of $0.01 per share for the quarter ended September 2025, with revenues projected at $95.82 million, reflecting a 39.4% increase year-over-year [3][12] - The consensus EPS estimate has been revised down by 30.44% over the last 30 days, indicating a reassessment by analysts [4] - The company currently holds a Zacks Rank of 3, suggesting a neutral outlook, which complicates predictions of an earnings beat [12][17] Earnings Expectations - The market anticipates that TXO's stock price may rise if actual earnings exceed expectations, while a miss could lead to a decline [2] - The Zacks Earnings ESP (Expected Surprise Prediction) for TXO is 0%, indicating no recent changes in analyst estimates that differ from the consensus [12] Historical Performance - In the last reported quarter, TXO was expected to post a loss of $0.02 per share but achieved break-even earnings, resulting in a surprise of +100.00% [13] - Over the past four quarters, TXO has only surpassed consensus EPS estimates once [14] Industry Context - Another company in the same sector, XPLR Infrastructure (XIFR), is expected to report a loss of $0.07 per share, with revenues projected at $331.56 million, up 3.9% year-over-year [18] - XPLR's consensus EPS estimate has been revised down by 7.3% in the last 30 days, and it currently has a Zacks Rank of 4, indicating a sell recommendation [19][20]

Core Viewpoint - TXO Partners LP is experiencing significant stock price movements and is under scrutiny ahead of its upcoming earnings report, with expectations of stagnant earnings but notable revenue growth compared to the previous year [1][2]. Company Performance - TXO Partners LP closed at $13.10, reflecting a +2.99% increase from the previous day, outperforming the S&P 500's loss of 0.53% [1]. - Prior to the latest trading session, TXO shares had declined by 9.27%, which is worse than the Oils-Energy sector's loss of 1.42% and the S&P 500's gain of 1.13% [1]. Earnings Expectations - Analysts anticipate TXO Partners LP will report earnings of $0.01 per share, indicating no growth from the same period last year [2]. - Revenue is expected to reach $95.82 million, representing a 39.42% increase compared to the year-ago quarter [2]. Fiscal Year Projections - For the entire fiscal year, earnings are projected at $0.18 per share, reflecting a decrease of 72.31% from the previous year, while revenue is expected to be $381.36 million, showing an increase of 34.85% [3]. Analyst Estimates - Recent changes in analyst estimates for TXO Partners LP are crucial as they reflect short-term business trends, with positive revisions indicating a favorable outlook on the company's health and profitability [4]. Zacks Rank and Valuation - TXO Partners LP currently holds a Zacks Rank of 5 (Strong Sell), with a consensus EPS projection that has decreased by 21.74% in the past 30 days [6]. - The company is trading at a Forward P/E ratio of 70.67, significantly higher than the industry average of 11.98, indicating a premium valuation [7]. Industry Context - The Energy and Pipeline - Master Limited Partnerships industry, to which TXO belongs, ranks in the bottom 3% of all industries according to the Zacks Industry Rank, which is based on the average Zacks Rank of individual stocks within these groups [7].

Group 1 - TXO Partners LP closed at $14.49, with a +1.68% increase, outperforming the S&P 500's gain of 0.37% [1] - The stock has risen by 5.01% over the past month, surpassing the Oils-Energy sector's gain of 2.31% and the S&P 500's gain of 4.26% [1] Group 2 - TXO Partners LP is expected to report an EPS of $0.08, reflecting a 700% increase from the same quarter last year [2] - Revenue is forecasted to be $99.66 million, indicating a 45% increase compared to the same quarter of the previous year [2] Group 3 - For the full year, earnings are projected at $0.23 per share, a decrease of 64.62% from the previous year, while revenue is expected to be $387.8 million, an increase of 37.12% [3] - Recent adjustments to analyst estimates may indicate shifting business dynamics, with positive changes reflecting analyst optimism [3] Group 4 - The Zacks Rank system, which assesses estimate revisions, indicates that TXO Partners LP currently holds a Zacks Rank of 5 (Strong Sell) [5] - The Zacks Rank has a historical average annual return of +25% for 1 stocks since 1988 [5] Group 5 - TXO Partners LP has a Forward P/E ratio of 61.96, significantly higher than the industry average of 12.4, suggesting it is trading at a premium [6] - The Energy and Pipeline - Master Limited Partnerships industry ranks in the bottom 13% of all industries, with a current Zacks Industry Rank of 215 [6]

Acquisition and Investments - The company acquired oil and gas assets from White Rock Energy, LLC for cash consideration of $338.6 million, including a deferred payment of $70.0 million due on July 31, 2026[104]. - The company completed a public offering resulting in net proceeds of approximately $189.5 million, which were used to fund the WRE Acquisition and repay borrowings[157]. - The company incurred approximately $15.2 million for drilling, completion, and recompletion activities in the six months ended June 30, 2025, with a budget of approximately $65.0 million for such costs in 2025[160]. Financial Performance - Total revenues increased by $32.6 million, or 57%, from $57.3 million in Q2 2024 to $89.9 million in Q2 2025, driven by a 407 MBoe increase in production and a 73% rise in average selling price of natural gas[126]. - Adjusted EBITDAX for Q2 2025 was $27.5 million, compared to $21.1 million in Q2 2024, reflecting a 30% increase[120]. - Cash available for distribution rose to $18.8 million in Q2 2025, up from $15.0 million in Q2 2024, marking a 25% increase[120]. - Revenues increased by $49.5 million, or 40%, from $124.7 million in 2024 to $174.2 million in 2025, driven by a 689 MBoe increase in production and a 32% increase in average selling price of natural gas[142]. - Net cash provided by operating activities increased by $9.4 million, from $48.1 million in 2024 to $57.5 million in 2025, attributed to improved operating results[166]. Expenses and Costs - Production expenses increased by $6.9 million, or 19%, from $36.4 million in Q2 2024 to $43.3 million in Q2 2025, primarily due to acquisitions in the Williston Basin[127]. - General and administrative expenses surged by $4.9 million, or 106%, from $4.6 million in Q2 2024 to $9.5 million in Q2 2025, mainly due to higher personnel costs[134]. - Depreciation, depletion, and amortization (DD&A) increased by $11.4 million, or 110%, from $10.3 million in Q2 2024 to $21.7 million in Q2 2025, largely due to higher rates from Williston Basin acquisitions[132]. - Total expenses for Q2 2025 were $93.6 million, up from $67.4 million in Q2 2024, reflecting a 39% increase[122]. - Production expenses rose by $16.1 million, or 23%, from $69.5 million in 2024 to $85.6 million in 2025, primarily due to acquisitions in the Williston Basin[143]. - Depreciation, depletion, and amortization increased by $22.3 million, or 107%, from $20.8 million in 2024 to $43.1 million in 2025, largely due to higher rates associated with Williston Basin acquisitions[148]. - General and administrative expenses increased by $4.7 million, or 64%, from $7.2 million in 2024 to $11.9 million in 2025, mainly due to higher personnel costs[150]. Market Conditions - NYMEX crude oil prices reached a high of $86.91 per Bbl and a low of $57.13 per Bbl from January 1, 2024, to June 30, 2025, indicating significant price volatility[107]. - Natural gas prices peaked at $4.49 per MMBtu in March 2025 before declining to $3.57 per MMBtu as of July 18, 2025[107]. - The company anticipates continued volatility in crude oil and natural gas markets, which will impact revenue and profitability[108]. - Inflationary pressures have increased operating costs, particularly for steel, chemicals, and transportation, with no short-term reversal expected[109]. Debt and Liquidity - The company increased its revolving credit facility borrowing base from $275 million to $410 million, extending the maturity date to August 30, 2029[105]. - Outstanding borrowings under the Credit Facility were $12.0 million at June 30, 2025, down from $150.0 million at December 31, 2024, with remaining availability increasing to $263.0 million[155]. - The weighted average interest rate on Credit Facility borrowings was 8.0% for the six months ended June 30, 2025[171]. - The net-debt-to-EBITDAX ratio is expected to increase to between 1.0 times and 1.5 times following the WRE Acquisition[158]. - The company believes it has adequate liquidity to continue as a going concern for at least the next twelve months from the date of the report[173]. Other Financial Metrics - Cash available for distribution is defined as Adjusted EBITDAX less net cash interest expense, exploration expense, non-recurring gains/losses, and development costs[118]. - Adjusted EBITDAX is used to evaluate operating performance, excluding interest, depreciation, impairment, and other non-cash expenses[114]. - The company plans to dynamically allocate funds to meet goals, including capital budget returns and acquisition opportunities[108]. - The second quarter distribution was declared at $0.45 per unit, with payments scheduled for August 22, 2025[159]. - As of June 30, 2025, the company had $12 million in debt outstanding and $263 million available under its Credit Facility[174].

Company Performance - TXO Partners LP (TXO) closed at $15.20, reflecting a -1.36% change from the previous day's closing price, underperforming the S&P 500's daily loss of 0.37% [1] - The stock has increased by 0.46% over the past month, which is below the Oils-Energy sector's gain of 3.65% and the S&P 500's gain of 2.68% [1] Earnings Expectations - The upcoming earnings report is expected to show an EPS of -$0.02, indicating a 122.22% decline compared to the same quarter last year [2] - Revenue is anticipated to be $81.09 million, representing a 41.49% increase from the prior-year quarter [2] Full-Year Estimates - Full-year Zacks Consensus Estimates project earnings of $0.77 per share and revenue of $372.59 million, reflecting year-over-year increases of +18.46% and +31.75%, respectively [3] Analyst Estimates and Outlook - Recent adjustments to analyst estimates for TXO indicate evolving short-term business trends, with positive revisions suggesting a favorable outlook on business health and profitability [4] - The Zacks Rank system, which incorporates estimate changes, currently ranks TXO as 5 (Strong Sell), with the consensus EPS estimate decreasing by 7.23% over the last 30 days [6] Valuation Metrics - TXO has a Forward P/E ratio of 20.01, which is a premium compared to the industry average Forward P/E of 13.22 [7] - The Energy and Pipeline - Master Limited Partnerships industry, part of the Oils-Energy sector, has a Zacks Industry Rank of 232, placing it in the bottom 7% of over 250 industries [7]

Company Performance - TXO Partners LP closed at $15.07, with a +1.14% change from the previous day, outperforming the S&P 500's gain of 0.78% [1] - The stock has decreased by 3.06% over the past month, underperforming the Oils-Energy sector's loss of 3.19% and the S&P 500's gain of 5.88% [1] Earnings Expectations - Analysts expect TXO Partners LP to report earnings of $0.17 per share, reflecting a year-over-year growth of 88.89% [2] - The consensus estimate for revenue is $81.89 million, indicating a 42.89% increase from the same quarter last year [2] Full-Year Estimates - Full-year Zacks Consensus Estimates project earnings of $0.77 per share and revenue of $391.11 million, representing year-over-year changes of +18.46% and +38.29%, respectively [3] - Recent revisions to analyst forecasts are crucial as they indicate changing business trends, with positive revisions suggesting analyst optimism [3] Valuation Metrics - TXO Partners LP has a Forward P/E ratio of 19.35, which is higher than the industry average Forward P/E of 12.27 [6] - The Energy and Pipeline - Master Limited Partnerships industry is ranked 234 in the Zacks Industry Rank, placing it in the bottom 6% of over 250 industries [6]

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